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Northwest Bancshares : Results of Operations and Financial Condition – Form 8-K

PRESS RELEASE OF NORTHWEST BANCSHARES, INC.

EARNINGS RELEASE

FOR IMMEDIATE RELEASE

Contact: William W. Harvey, Jr., Chief Financial Officer and Interim President and Chief Executive Officer (814) 726-2140
Jeffrey J. Maddigan, Treasurer and Executive Vice President of Finance and Accounting (814) 726-2140

Northwest Bancshares, Inc. Announces Second Quarter 2022 Earnings and Quarterly Dividend

Columbus, Ohio – July 25, 2022

Northwest Bancshares, Inc., (the “Company”), (NasdaqGS: NWBI) announced net income for the quarter ended June 30, 2022 of $33.4 million, or $0.26 per diluted share. This represents a decrease of $15.5 million, or 31.7%, compared to the same quarter last year, when net income was $49.0 million, or $0.38 per diluted share. The annualized returns on average shareholders’ equity and average assets for the quarter ended June 30, 2022 were 8.90% and 0.94% compared to 12.58% and 1.37% for the same quarter last year. Prior year earnings were enhanced by a $25.3 million pre-tax gain on the sale of the Northwest insurance line of business.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share payable on August 15, 2022 to shareholders of record as of August 4, 2022. This is the 111th 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, 2022, this represents an annualized dividend yield of approximately 6.0%.

During the second quarter, the Company announced the unfortunate passing of Chairman, President, and Chief Executive Officer, Ronald J. Seiffert, from natural causes. Subsequently, as announced on May 25, 2022, the Northwest Bancshares and Northwest Bank Boards of Directors named the Company’s Chief Financial Officer, William W. Harvey Jr,. as interim President and Chief Executive Officer and the Company’s Lead Director, Timothy B. Fannin, as interim Chairman of the Board.

Mr. Harvey commented, “Everyone in the Northwest family is deeply saddened by the unexpected passing of Ron. Ron was such a strong leader during his time at Northwest and he positioned us well for the future. We are committed to carrying out his vision and strategic direction for the company.”

In relation to the quarterly results, Mr. Harvey noted, “We are pleased with the loan growth momentum generated during the quarter with organic loan growth of approximately $200.0 million, or almost 2.0%, augmented by the purchase of a $50.0 million one-to-four family jumbo mortgage loan portfolio and a $43.0 million small business equipment finance pool.Also, during the quarter our net interest margin expanded by 32bp as a result of both an increase in market interest rates and the deployment of excess liquidity into higher yielding interest-earning assets.”

Mr. Harvey continued, “Asset quality metrics continue to improve with nonperforming and classified assets dropping to $100.0 million and $277.4 million, respectively, and total delinquency and net charge-offs falling to pre-pandemic levels. Outside of an increase in other noninterest expense related primarily to an additional $3.4 million reserve for unfunded loan commitments, we continue to see a favorable trend in expense management over the past five quarters.”

Net interest income increased by $4.5 million, or 4.7%, to $100.3 million for the quarter ended June 30, 2022, from $95.7 million for the quarter ended June 30, 2021, due primarily to a $1.5 million increase in both interest income on mortgage-backed securities and interest income on interest-earning deposits. The increase in interest income on mortgage-backed securities was due to an increase of $196.1 million, or 11.2%, in the average balance of mortgage-backed securities in addition to an increase in the yield on mortgage-backed securities to 1.47% for the quarter ended June 30, 2022 from 1.29% for the quarter ended June 30, 2021. The increase in interest income on interest-earning deposits was due to an increase of $35.4 million, or 4.4%, in the average balance of interest-earning deposits in addition to an increase in the yield on interest-earning deposits to 0.79% for the quarter ended June 30, 2022 from 0.09% for the quarter ended June 30, 2021. Also contributing to the increase in net interest income was a decrease in interest expense on deposits of $1.4 million, or 30.0%, primarily due to a decrease in our cost of our interest-bearing liabilities to 0.24% for the quarter ended June 30, 2022, from 0.29% for the quarter ended June 30, 2021. The net effect of the changes in interest rates and average balances was an increase in the Company’s net interest margin to 3.07% for the quarter ended June 30, 2022, from 2.91% for the same quarter last year.

1

The Company continued to experience improvement in asset quality as classified loans decreased by $175.7 million, or 38.8%, to $277.4 million, or 2.7% of total loans, at June 30, 2022, from $453.1 million, or 4.4% of total loans, at June 30, 2021. Total delinquent loans also decreased to $51.1 million, or 0.49% of loans receivable, at June 30, 2022 from $68.9 million, or 0.70% of loans receivable, at June 30, 2021. In addition, annualized net charge-offs were 0.14% during the current quarter compared to 0.26% during the same quarter last year. As the result, the provision for credit losses during the current quarter remained historically low at just $2.6 million.

Noninterest income decreased by $24.3 million, or 44.3%, to $30.4 million for the quarter ended June 30, 2022, from $54.7 million for the quarter ended June 30, 2021. This decrease was primarily due to the sale of our insurance business in the second quarter of 2021, for a pre-tax gain of $25.3 million, which also resulted in a decrease in insurance commission income of $1.0 million, or 100.0% from the quarter ended June 30, 2021. In addition, mortgage banking income decreased by $1.7 million, or 43.4%, to $2.2 million for the quarter ended June 30, 2022 from $3.8 million for the quarter ended June 30, 2021. This decrease reflects the impact of less favorable pricing in the secondary market, due primarily to the volatile interest rate environment. Offsetting these decreases was an increase in other operating income of $2.2 million, or 83.6%, to $4.9 million for the quarter ended June 30, 2022 from $2.6 million for the quarter ended June 30, 2021 due to an increase in swap fee income as well as a gain of approximately $1.0 million from the sale of branch buildings associated with the previously announced consolidation of 20 branch office facilities.

Noninterest expense decreased by $1.5 million, or 1.8%, to $84.8 million for the quarter ended June 30, 2022 from $86.3 million for the quarter ended June 30, 2021. This decrease primarily resulted from a $2.2 million, or 14.5%, decrease in processing expense to $12.9 million for the quarter ended June 30, 2022 from $15.2 million for the quarter ended June 30, 2021 due to the investment in our technology and infrastructure during the prior year. Also contributing to this favorable variance was an $898,000, or 21.2%, decrease in professional services to $3.3 million for the quarter ended June 30, 2022 from $4.2 million for the quarter ended June 30, 2021 due to the use of third-party experts to assist with our digital strategy rollout in the prior year. Compensation and employee benefits also decreased by $821,000, or 1.7%, to $48.1 million for the quarter ended June 30, 2022 from $48.9 million for the quarter ended June 30, 2021, despite recognizing approximately $1.4 million of additional expenses related to the acceleration of compensation and stock benefits upon Mr. Seiffert’s passing. The decrease in compensation and employee benefits was driven primarily by the branch consolidations completed in April.Partially offsetting these decreases was an increase in other expenses of $3.8 million to $5.2 million for the quarter ended June 30, 2022 from $1.4 million for the quarter ended June 30, 2021 due to an increase in our unfunded loan loss reserve associated with the origination of loans with current off balance sheet exposure.

The provision for income taxes decreased by $5.3 million, or 34.9%, to $9.9 million for the quarter ended June 30, 2022, from $15.1 million for the quarter ended June 30, 2021, due primarily to a decrease 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 June 30, 2022, 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 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.

2

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Financial Condition (Unaudited)

(dollars in thousands, except per share amounts)

June 30,
2022
December 31,
2021
June 30,
2021
Assets
Cash and cash equivalents $ 504,532 1,279,259 857,152
Marketable securities available-for-sale (amortized cost of $1,516,743, $1,565,002 and $1,593,813, respectively) 1,364,743 1,548,592 1,599,024
Marketable securities held-to-maturity (fair value of $835,565, $751,513 and $632,620, respectively) 923,180 768,154 639,424
Total cash and cash equivalents and marketable securities 2,792,455 3,596,005 3,095,600
Residential mortgage loans held-for-sale 31,153 25,056 29,055
Residential mortgage loans 3,255,622 2,969,564 2,925,496
Home equity loans 1,280,492 1,319,931 1,376,228
Consumer loans 2,002,545 1,838,748 1,745,231
Commercial real estate loans 2,876,176 3,015,484 3,215,189
Commercial loans 986,836 847,609 1,018,781
Total loans receivable 10,432,824 10,016,392 10,309,980
Allowance for credit losses (98,355) (102,241) (117,330)
Loans receivable, net 10,334,469 9,914,151 10,192,650
FHLB stock, at cost 13,362 14,184 23,287
Accrued interest receivable 27,708 25,599 27,585
Real estate owned, net 1,205 873 1,353
Premises and equipment, net 146,869 156,524 156,076
Bank-owned life insurance 254,109 256,213 253,539
Goodwill 380,997 380,997 380,997
Other intangible assets, net 10,538 12,836 15,362
Other assets 192,983 144,126 151,607
Total assets $ 14,154,695 14,501,508 14,298,056
Liabilities and shareholders’ equity
Liabilities
Noninterest-bearing demand deposits $ 3,058,249 3,099,526 3,002,632
Interest-bearing demand deposits 2,858,691 2,940,442 2,824,219
Money market deposit accounts 2,631,712 2,629,882 2,538,607
Savings deposits 2,362,725 2,303,760 2,262,152
Time deposits 1,155,878 1,327,555 1,463,098
Total deposits 12,067,255 12,301,165 12,090,708
Borrowed funds 130,490 139,093 133,876
Subordinated debt 113,666 123,575 123,501
Junior subordinated debentures 129,184 129,054 128,924
Advances by borrowers for taxes and insurance 55,622 44,582 53,608
Accrued interest payable 1,725 1,804 1,820
Other liabilities 162,214 178,664 190,258
Total liabilities 12,660,156 12,917,937 12,722,695
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, 126,881,766, 126,612,183 and 127,907,885 shares issued and outstanding, respectively

1,269 1,266 1,279
Additional paid-in capital 1,015,349 1,010,405 1,025,174
Retained earnings 620,551 609,529 595,100
Accumulated other comprehensive loss (142,630) (37,629) (46,192)
Total shareholders’ equity 1,494,539 1,583,571 1,575,361
Total liabilities and shareholders’ equity $ 14,154,695 14,501,508 14,298,056
Equity to assets 10.56 % 10.92 % 11.02 %
Tangible common equity to assets* 8.01 % 8.43 % 8.48 %
Book value per share $ 11.78 12.51 12.32
Tangible book value per share* $ 8.69 9.40 9.22
Closing market price per share $ 12.80 14.16 13.64
Full time equivalent employees 2,188 2,332 2.393
Number of banking offices 150 170 170

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

3

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income (Unaudited)

(dollars in thousands, except per share amounts)

Quarter ended
June 30,
2022
March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
Interest income:
Loans receivable $ 95,574 88,174 95,295 97,475 95,255
Mortgage-backed securities 7,158 6,360 5,743 5,840 5,680
Taxable investment securities 715 677 640 649 693
Tax-free investment securities 683 674 688 628 594
FHLB stock dividends 82 81 82 71 138
Interest-earning deposits 1,684 467 467 352 192
Total interest income 105,896 96,433 102,915 105,015 102,552
Interest expense:
Deposits 3,341 3,751 4,295 4,540 4,773
Borrowed funds 2,290 2,059 1,964 2,056 2,050
Total interest expense 5,631 5,810 6,259 6,596 6,823
Net interest income 100,265 90,623 96,656 98,419 95,729
Provision for credit losses 2,629 (1,481) (1,909) (4,354)
Net interest income after provision for credit losses 97,636 92,104 98,565 102,773 95,729
Noninterest income:
Loss on sale of investments (3) (2) (4) (46) (105)
Service charges and fees 13,673 13,067 13,500 13,199 12,744
Trust and other financial services income 7,461 7,012 6,820 7,182 7,435
Insurance commission income 44 1,043
Gain/(loss) on real estate owned, net 291 (29) 71 247 166
Income from bank-owned life insurance 2,008 1,983 1,343 1,332 1,639
Mortgage banking income 2,157 1,465 2,120 3,941 3,811
Gain on sale of insurance business 25,327
Other operating income 4,861 2,244 3,192 3,287 2,648
Total noninterest income 30,448 25,740 27,042 29,186 54,708
Noninterest expense:
Compensation and employee benefits 48,073 46,917 48,691 49,063 48,894
Premises and occupancy costs 7,280 7,797 7,104 7,745 7,410
Office operations 3,162 3,383 3,144 4,143 3,317
Collections expense 403 520 602 411 303
Processing expenses 12,947 12,548 13,639 13,517 15,151
Marketing expenses 2,047 2,128 2,054 2,102 2,101
Federal deposit insurance premiums 1,130 1,129 1,131 1,184 1,353
Professional services 3,333 2,573 4,513 4,295 4,231
Amortization of intangible assets 1,115 1,183 1,205 1,321 1,433
Real estate owned expense 72 37 44 94 85
Merger, asset disposition and restructuring expense 1,374 2,812 632
Other expenses 5,245 2,355 1,346 2,227 1,422
Total noninterest expense 84,807 81,944 86,285 86,102 86,332
Income before income taxes 43,277 35,900 39,322 45,857 64,105
Income tax expense 9,851 7,613 9,266 10,794 15,138
Net income $ 33,426 28,287 30,056 35,063 48,967
Basic earnings per share $ 0.26 0.22 0.24 0.28 0.38
Diluted earnings per share $ 0.26 0.22 0.24 0.27 0.38
Annualized return on average equity 8.90 % 7.17 % 7.65 % 8.86 % 12.58 %
Annualized return on average assets 0.94 % 0.80 % 0.82 % 0.97 % 1.37 %
Annualized return on tangible common equity * 12.16 % 10.14 % 10.02 % 11.92 % 16.66 %
Efficiency ratio ** 64.03 % 68.22 % 66.51 % 66.44 % 67.35 %
Annualized noninterest expense to average assets *** 2.35 % 2.23 % 2.25 % 2.33 % 2.35 %

* 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).

4

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income (Unaudited)

(dollars in thousands, except per share amounts)

Six months ended June 30,
2022 2021
Interest income:
Loans receivable $ 183,748 197,573
Mortgage-backed securities 13,518 9,880
Taxable investment securities 1,392 1,327
Tax-free investment securities 1,357 1,169
FHLB stock dividends 163 254
Interest-earning deposits 2,151 375
Total interest income 202,329 210,578
Interest expense:
Deposits 7,092 10,287
Borrowed funds 4,349 4,104
Total interest expense 11,441 14,391
Net interest income 190,888 196,187
Provision for credit losses 1,148 (5,620)
Net interest income after provision for credit losses 189,740 201,807
Noninterest income:
Loss on sale of investments (5) (126)
Service charges and fees 26,740 25,138
Trust and other financial services income 14,473 13,919
Insurance commission income 3,589
Gain on real estate owned, net 262 124
Income from bank-owned life insurance 3,991 3,375
Mortgage banking income 3,622 9,831
Gain on sale of insurance business 25,327
Other operating income 7,105 5,484
Total noninterest income 56,188 86,661
Noninterest expense:
Compensation and employee benefits 94,990 96,133
Premises and occupancy costs 15,077 16,224
Office operations 6,545 6,482
Collections expense 923 919
Processing expenses 25,495 28,607
Marketing expenses 4,175 4,081
Federal deposit insurance premiums 2,259 2,660
Professional services 5,906 8,813
Amortization of intangible assets 2,298 3,027
Real estate owned expense 109 160
Merger, asset disposition and restructuring expense 1,374 641
Other expenses 7,600 4,776
Total noninterest expense 166,751 172,523
Income before income taxes 79,177 115,945
Income tax expense 17,464 26,741
Net income $ 61,713 89,204
Basic earnings per share $ 0.49 0.70
Diluted earnings per share $ 0.49 0.70
Annualized return on average equity 8.01 % 11.61 %
Annualized return on average assets 0.87 % 1.27 %
Annualized return on tangible common equity * 11.28 % 15.26 %
Efficiency ratio ** 66.00 % 65.57 %
Annualized noninterest expense to average assets *** 2.29 % 2.40 %

* 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).

5

Northwest Bancshares, Inc. and Subsidiaries

Asset Quality (Unaudited)

(dollars in thousands)

June 30,
2022
March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
Nonaccrual loans current:
Residential mortgage loans $ 1,970 1,884 1,354 2,015 189
Home equity loans 1,337 1,376 1,212 1,267 170
Consumer loans 976 1,148 1,336 1,465 188
Commercial real estate loans 60,537 79,810 106,233 111,075 138,820
Commercial loans 5,270 6,060 6,098 17,021 17,545
Total nonaccrual loans current $ 70,090 90,278 116,233 132,843 156,912
Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans $ 2 760 244 99 68
Home equity loans 172 195 223 328 229
Consumer loans 158 190 241 152 230
Commercial real estate loans 911 333 239 205 1,589
Commercial loans 358 4 53 102 406
Total nonaccrual loans delinquent 30 days to 59 days $ 1,601 1,482 1,000 886 2,522
Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans $ 199 830 1,163 527 207
Home equity loans 566 371 61 142 310
Consumer loans 226 280 292 291 297
Commercial real estate loans 630 364 419 198
Commercial loans 73 218 170 21
Total nonaccrual loans delinquent 60 days to 89 days $ 1,694 1,481 2,098 1,549 1,033
Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans $ 5,445 3,976 7,641 8,069 10,007
Home equity loans 2,081 2,968 4,262 4,745 6,256
Consumer loans 1,942 1,782 2,069 2,184 2,341
Commercial real estate loans 14,949 21,399 24,063 25,562 23,564
Commercial loans 583 795 1,105 1,104 4,126
Total nonaccrual loans delinquent 90 days or more $ 25,000 30,920 39,140 41,664 46,294
Total nonaccrual loans $ 98,385 124,161 158,471 176,942 206,761
Total nonaccrual loans $ 98,385 124,161 158,471 176,942 206,761
Loans 90 days past due and still accruing 379 420 331 386 302
Nonperforming loans 98,764 124,581 158,802 177,328 207,063
Real estate owned, net 1,205 929 873 809 1,353
Nonperforming assets $ 99,969 125,510 159,675 178,137 208,416
Nonaccrual troubled debt restructuring * $ 37,647 16,015 17,216 12,858 8,951
Accruing troubled debt restructuring 16,590 12,686 13,072 13,664 18,480
Total troubled debt restructuring $ 54,237 28,701 30,288 26,522 27,431
Nonperforming loans to total loans 0.95 % 1.23 % 1.59 % 1.74 % 2.01 %
Nonperforming assets to total assets 0.71 % 0.87 % 1.10 % 1.24 % 1.46 %
Allowance for credit losses to total loans 0.94 % 0.98 % 1.02 % 1.08 % 1.14 %
Allowance for total loans excluding PPP loan balances 0.95 % 0.98 % 1.03 % 1.09 % 1.17 %
Allowance for credit losses to nonperforming loans 99.59 % 79.70 % 64.38 % 61.90 % 56.66 %

* Amounts included in nonperforming loans above.

6

Northwest Bancshares, Inc. and Subsidiaries

Loans by Credit Quality Indicators (Unaudited)

(dollars in thousands)

At June 30, 2022 Pass Special
mention *
Substandard
**
Doubtful Loss Loans
receivable
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
At December 31, 2021
Personal Banking:
Residential mortgage loans $ 2,978,080 16,540 2,994,620
Home equity loans 1,312,820 7,111 1,319,931
Consumer loans 1,834,478 4,270 1,838,748
Total Personal Banking 6,125,378 27,921 6,153,299
Commercial Banking:
Commercial real estate loans 2,639,676 74,123 301,685 3,015,484
Commercial loans 808,323 5,730 33,556 847,609
Total Commercial Banking 3,447,999 79,853 335,241 3,863,093
Total loans $ 9,573,377 79,853 363,162 10,016,392
At September 30, 2021
Personal Banking:
Residential mortgage loans $ 2,972,489 17,032 2,989,521
Home equity loans 1,342,479 7,869 1,350,348
Consumer loans 1,812,360 4,476 1,816,836
Total Personal Banking 6,127,328 29,377 6,156,705
Commercial Banking:
Commercial real estate loans 2,799,592 63,034 299,925 3,162,551
Commercial loans 813,665 10,976 55,071 879,712
Total Commercial Banking 3,613,257 74,010 354,996 4,042,263
Total loans $ 9,740,585 74,010 384,373 10,198,968
At June 30, 2021
Personal Banking:
Residential mortgage loans $ 2,937,418 17,133 2,954,551
Home equity loans 1,367,765 8,463 1,376,228
Consumer loans 1,741,872 3,359 1,745,231
Total Personal Banking 6,047,055 28,955 6,076,010
Commercial Banking:
Commercial real estate loans 2,781,734 73,167 360,288 3,215,189
Commercial loans 943,665 11,266 63,850 1,018,781
Total Commercial Banking 3,725,399 84,433 424,138 4,233,970
Total loans $ 9,772,454 84,433 453,093 10,309,980

* Includes $7.4 million, $4.4 million, $14.9 million, $16.7 million, and $16.7 million of acquired loans at June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021, and June 30, 2021, respectively.

** Includes $59.3 million, $71.9 million, $81.5 million, $110.4 million, and $122.5 million of acquired loans at June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021, and June 30, 2021, respectively.

7

Northwest Bancshares, Inc. and Subsidiaries

Loan Delinquency (Unaudited)

(dollars in thousands)

June 30,
2022
* March 31,
2022
* December 31,
2021
* September 30,
2021
* June 30,
2021
*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans 20 $ 785 % 281 $ 24,057 0.8 % 277 $ 20,567 0.7 % 17 $ 765 % 13 $ 606 %
Home equity loans 107 3,664 0.3 % 105 3,867 0.3 % 112 3,153 0.2 % 101 3,351 0.2 % 91 3,677 0.3 %
Consumer loans 563 6,898 0.3 % 523 6,043 0.3 % 589 6,536 0.4 % 576 6,146 0.3 % 532 5,571 0.3 %
Commercial real estate loans 26 2,701 0.1 % 25 3,643 0.1 % 17 17,065 0.6 % 19 2,004 0.1 % 13 2,857 0.1 %
Commercial loans 24 1,486 0.2 % 16 1,268 0.1 % 12 193 % 10 692 0.1 % 15 686 0.1 %
Total loans delinquent 30 days to 59 days 740 $ 15,534 0.1 % 950 $ 38,878 0.4 % 1,007 $ 47,514 0.5 % 723 $ 12,958 0.1 % 664 $ 13,397 0.1 %
Loans delinquent 60 days to 89 days:
Residential mortgage loans 61 $ 5,941 0.2 % 24 $ 1,950 0.1 % 59 $ 5,433 0.2 % 55 $ 4,907 0.2 % 58 $ 4,051 0.1 %
Home equity loans 28 952 0.1 % 28 1,138 0.1 % 30 949 0.1 % 29 1,024 0.1 % 36 1,502 0.1 %
Consumer loans 178 1,460 0.1 % 159 1,839 0.1 % 195 2,006 0.1 % 180 1,757 0.1 % 181 1,988 0.1 %
Commercial real estate loans 9 1,472 0.1 % 1 112 % 5 769 % 8 1,170 % 9 1,335 %
Commercial loans 6 341 % 3 103 % 10 727 0.1 % 2 170 % 2 27 %
Total loans delinquent 60 days to 89 days 282 $ 10,166 0.1 % 215 $ 5,142 0.1 % 299 $ 9,884 0.1 % 274 $ 9,028 0.1 % 286 $ 8,903 0.1 %
Loans delinquent 90 days or more: **
Residential mortgage loans 63 $ 5,445 0.2 % 47 $ 3,976 0.1 % 87 $ 7,641 0.3 % 95 $ 8,069 0.3 % 115 $ 10,007 0.3 %
Home equity loans 69 2,081 0.2 % 91 2,968 0.2 % 105 4,262 0.3 % 119 4,745 0.4 % 146 6,256 0.5 %
Consumer loans 286 2,321 0.1 % 287 2,202 0.1 % 296 2,400 0.1 % 308 2,568 0.1 % 356 2,643 0.2 %
Commercial real estate loans 31 14,949 0.5 % 41 21,399 0.7 % 52 24,063 0.8 % 59 25,562 0.8 % 83 23,564 0.7 %
Commercial loans 10 583 0.1 % 10 795 0.1 % 8 1,105 0.1 % 10 1,104 0.1 % 18 4,126 0.4 %
Total loans delinquent 90 days or more 459 $ 25,379 0.2 % 476 $ 31,340 0.3 % 548 $ 39,471 0.4 % 591 $ 42,048 0.4 % 718 $ 46,596 0.5 %
Total loans delinquent 1,481 $ 51,079 0.5 % 1,641 $ 75,360 0.7 % 1,854 $ 96,869 1.0 % 1,588 $ 64,034 0.6 % 1,668 $ 68,896 0.7 %

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

** Includes purchased credit deteriorated loans of $6.3 million, $7.1 million, $7.3 million, $8.4 million, and $10.3 million at June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021, and June 30, 2021, respectively.

8

Northwest Bancshares, Inc. and Subsidiaries

Allowance for Credit Losses (Unaudited)

(dollars in thousands)

Quarter ended
June 30,
2022
March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
Beginning balance $ 99,295 102,241 109,767 117,330 123,997
Provision 2,629 (1,481) (1,909) (4,354)
Charge-offs residential mortgage (138) (1,183) (784) (1,263) (770)
Charge-offs home equity (255) (447) (1,299) (1,474) (379)
Charge-offs consumer (1,912) (1,723) (2,897) (2,148) (2,401)
Charge-offs commercial real estate (4,392) (1,024) (2,652) (1,581) (3,964)
Charge-offs commercial (329) (681) (2,586) (412) (1,161)
Recoveries 3,457 3,593 4,601 3,669 2,008
Ending balance $ 98,355 99,295 102,241 109,767 117,330
Net charge-offs to average loans, annualized 0.14 % 0.06 % 0.22 % 0.12 % 0.26 %
Six months ended June 30,
2022 2021
Beginning balance $ 102,241 134,427
Provision 1,148 (5,620)
Charge-offs residential mortgage (1,321) (1,625)
Charge-offs home equity (702) (607)
Charge-offs consumer (3,635) (5,004)
Charge-offs commercial real estate (5,416) (8,590)
Charge-offs commercial (1,010) (1,215)
Recoveries 7,050 5,564
Ending balance $ 98,355 117,330
Net charge-offs to average loans, annualized 0.10 % 0.22 %

9

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, 2022 March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021
Average
balance
Interest Avg.
yield/
cost (i)
Average
balance
Interest Avg.
yield/
cost (i)
Average
balance
Interest Avg.
yield/
cost (i)
Average
balance
Interest Avg.
yield/
cost (i)
Average
balance
Interest Avg.
yield/
cost (i)
Assets:
Interest-earning assets:
Residential mortgage loans $ 3,171,469 27,327 3.45 % $ 2,980,788 25,542 3.43 % $ 2,977,942 25,269 3.39 % $ 2,959,794 25,398 3.43 % $ 2,935,034 25,609 3.49 %
Home equity loans 1,277,440 11,961 3.76 % 1,293,986 11,472 3.60 % 1,328,553 11,750 3.51 % 1,356,131 11,993 3.51 % 1,380,794 12,232 3.55 %
Consumer loans 1,880,769 15,777 3.36 % 1,799,037 14,907 3.36 % 1,756,620 15,514 3.50 % 1,728,563 16,220 3.72 % 1,589,739 14,555 3.67 %
Commercial real estate loans 2,915,750 31,844 4.32 % 3,000,204 29,757 3.97 % 3,113,924 34,062 4.28 % 3,205,839 35,305 4.31 % 3,257,810 33,349 4.05 %
Commercial loans 912,454 9,090 3.94 % 824,770 6,897 3.34 % 855,998 9,154 4.18 % 975,603 9,096 3.65 % 1,133,969 9,978 3.48 %
Total loans receivable (a) (b) (d) 10,157,882 95,999 3.79 % 9,898,785 88,575 3.63 % 10,033,037 95,749 3.79 % 10,225,930 98,012 3.80 % 10,297,346 95,723 3.73 %
Mortgage-backed securities (c) 1,952,375 7,158 1.47 % 1,945,173 6,360 1.31 % 1,894,683 5,743 1.21 % 1,832,876 5,840 1.27 % 1,756,227 5,680 1.29 %
Investment securities (c) (d) 376,935 1,590 1.69 % 373,694 1,540 1.65 % 358,558 1,535 1.71 % 348,619 1,466 1.68 % 364,414 1,466 1.61 %
FHLB stock, at cost 13,428 82 2.44 % 13,870 81 2.38 % 14,459 82 2.25 % 21,607 71 1.31 % 23,107 138 2.40 %
Other interest-earning deposits 846,142 1,684 0.79 % 1,218,960 467 0.15 % 1,168,449 467 0.16 % 905,130 352 0.15 % 810,741 192 0.09 %
Total interest-earning assets 13,346,762 106,513 3.20 % 13,450,482 97,023 2.93 % 13,469,186 103,576 3.05 % 13,334,162 105,741 3.15 % 13,251,835 103,199 3.12 %
Noninterest-earning assets (e) 909,943 973,092 1,004,905 1,074,122 1,104,924
Total assets $ 14,256,705 $ 14,423,574 $ 14,474,091 $ 14,408,284 $ 14,356,759
Liabilities and shareholders’ equity:
Interest-bearing liabilities:
Savings deposits $ 2,361,919 589 0.10 % $ 2,334,494 592 0.10 % $ 2,282,606 622 0.11 % $ 2,271,365 603 0.11 % $ 2,255,578 590 0.10 %
Interest-bearing demand deposits 2,857,336 310 0.04 % 2,875,430 321 0.05 % 2,933,466 411 0.06 % 2,890,905 414 0.06 % 2,840,949 407 0.06 %
Money market deposit accounts 2,653,467 668 0.10 % 2,668,105 653 0.10 % 2,618,177 656 0.10 % 2,565,159 637 0.10 % 2,537,629 621 0.10 %
Time deposits 1,220,815 1,774 0.58 % 1,292,608 2,185 0.69 % 1,356,513 2,606 0.76 % 1,423,041 2,886 0.80 % 1,493,947 3,155 0.85 %
Borrowed funds (f) 123,749 167 0.54 % 135,289 158 0.47 % 135,038 159 0.47 % 131,199 154 0.47 % 131,240 150 0.46 %
Subordinated debt (g) 119,563 1,203 4.03 % 123,608 1,250 4.05 % 123,514 1,180 3.82 % 123,513 1,277 4.10 % 123,443 1,264 4.11 %
Junior subordinated debentures 129,142 920 2.82 % 129,077 651 2.02 % 129,012 625 1.89 % 128,946 625 1.90 % 128,882 636 1.95 %
Total interest-bearing liabilities 9,465,991 5,631 0.24 % 9,558,611 5,810 0.25 % 9,578,326 6,259 0.26 % 9,534,128 6,596 0.27 % 9,511,668 6,823 0.29 %
Noninterest-bearing demand deposits (h) 3,090,372 3,060,698 3,093,518 3,058,819 3,036,202
Noninterest-bearing liabilities 193,510 203,537 242,620 244,402 247,930
Total liabilities 12,749,873 12,822,846 12,914,464 12,837,349 12,795,800
Shareholders’ equity 1,506,832 1,600,728 1,559,627 1,570,935 1,560,959
Total liabilities and shareholders’ equity $ 14,256,705 $ 14,423,574 $ 14,474,091 $ 14,408,284 $ 14,356,759
Net interest income/Interest rate spread 100,882 2.96 % 91,213 2.68 % 97,317 2.79 % 99,145 2.87 % 96,376 2.84 %
Net interest-earning assets/Net interest margin $ 3,880,771 3.07 % $ 3,891,871 2.75 % $ 3,890,860 2.89 % $ 3,800,034 2.97 % $ 3,740,167 2.91 %
Ratio of interest-earning assets to interest-bearing liabilities 1.41X 1.41X 1.41X 1.40X 1.39X

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

(h) Average cost of deposits were 0.11%, 0.12%, 0.14%, 0.15%, and 0.16%, respectively.

(i) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans – 3.77%, 3.61%, 3.77%, 3.79%, and 3.71%, respectively, Investment securities – 1.48%, 1.45%, 1.48%, 1.47%, and 1.41%, respectively, Interest-earning assets – 3.18%, 2.91%, 3.03%, 3.13%, and 3.10%, respectively. GAAP basis net interest rate spreads were 2.94%, 2.66%, 2.77%, 2.86%, and 2.82%, respectively, and GAAP basis net interest margins were 3.05%, 2.73%, 2.87%, 2.95%, and 2.89%, respectively.

10

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.

Six months ended June 30,
2022 2021
Average
balance
Interest Avg.
yield/
cost (i)
Average
balance
Interest Avg.
yield/
cost (i)
Assets
Interest-earning assets:
Residential mortgage loans $ 3,077,155 52,868 3.44 % $ 2,971,037 51,975 3.50 %
Home equity loans 1,285,668 23,433 3.68 % 1,406,260 25,046 3.57 %
Consumer loans 1,840,110 30,684 3.36 % 1,526,861 29,121 3.82 %
Commercial real estate loans 2,957,744 61,601 4.14 % 3,285,696 71,820 4.32 %
Commercial loans 868,854 15,987 3.66 % 1,161,736 20,543 3.50 %
Loans receivable (a) (b) (d) 10,029,531 184,573 3.71 % 10,351,590 198,505 3.85 %
Mortgage-backed securities (c) 1,948,794 13,518 1.39 % 1,541,585 9,880 1.28 %
Investment securities (c) (d) 375,323 3,130 1.67 % 347,977 2,847 1.64 %
FHLB stock, at cost 13,648 163 2.41 % 22,462 254 2.27 %
Other interest-earning deposits 1,003,627 2,151 0.43 % 805,930 375 0.09 %
Total interest-earning assets 13,370,923 203,535 3.07 % 13,069,544 211,861 3.25 %
Noninterest-earning assets (e) 969,111 1,103,734
Total assets $ 14,340,034 $ 14,173,278
Liabilities and shareholders’ equity
Interest-bearing liabilities:
Savings deposits $ 2,348,282 1,181 0.10 % $ 2,187,184 1,215 0.11 %
Interest-bearing demand deposits 2,866,333 631 0.04 % 2,812,348 836 0.06 %
Money market deposit accounts 2,660,745 1,321 0.10 % 2,517,673 1,278 0.10 %
Time deposits 1,256,513 3,959 0.64 % 1,538,489 6,959 0.91 %
Borrowed funds (f) 129,487 324 0.50 % 137,488 303 0.44 %
Subordinated debt (g) 121,574 2,454 4.04 % 123,400 2,522 4.10 %
Junior subordinated debentures 129,109 1,571 2.42 % 128,850 1,278 1.96 %
Total interest-bearing liabilities 9,512,043 11,441 0.24 % 9,445,432 14,391 0.31 %
Noninterest-bearing demand deposits (h) 3,075,617 2,921,343
Noninterest-bearing liabilities 198,854 256,748
Total liabilities 12,786,514 12,623,523
Shareholders’ equity 1,553,520 1,549,755
Total liabilities and shareholders’ equity $ 14,340,034 $ 14,173,278
Net interest income/Interest rate spread 192,094 2.83 % 197,470 2.94 %
Net interest-earning assets/Net interest margin $ 3,858,880 2.87 % $ 3,624,112 3.02 %
Ratio of interest-earning assets to interest-bearing liabilities 1.41X 1.38X

(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.

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

(h)Average cost of deposits were 0.12% and 0.17%, respectively.

(i)Shown on a FTE basis. GAAP basis yields were: Loans – 3.69% and 3.83%, respectively; Investment securities – 1.46% and 1.43%, respectively; Interest-earning assets – 3.05% and 3.23%, respectively. GAAP basis net interest rate spreads were 2.81% and 2.92%, respectively; and GAAP basis net interest margins were 2.86% and 3.00%, respectively.

11

Disclaimer

Northwest Bancshares Inc. published this content on 25 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 July 2022 13:03:02 UTC.

Publicnow 2022

All news about NORTHWEST BANCSHARES, INC.

Analyst Recommendations on NORTHWEST BANCSHARES, INC.

Sales 2022 497 M

Net income 2022 116 M

Net Debt 2022

P/E ratio 2022 14,3x
Yield 2022 6,15%
Capitalization 1 656 M
1 656 M
Capi. / Sales 2022 3,34x
Capi. / Sales 2023 3,13x
Nbr of Employees 2 332
Free-Float 94,9%

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Northwest Bancshares, Inc. Technical Analysis Chart | MarketScreener

Technical analysis trends NORTHWEST BANCSHARES, INC.

Short Term Mid-Term Long Term
Trends Bullish Bearish Bearish

Income Statement Evolution

Sell

Buy

Mean consensus HOLD
Number of Analysts 7
Last Close Price 13,07 $
Average target price 12,40 $
Spread / Average Target -5,13%

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