Northwest Bancshares, Inc. Announces First Quarter 2021 Earnings and Quarterly Dividend Increase

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Apr 26, 2021, 09:00 ET

WARREN, Pa., April 26, 2021 /PRNewswire/ -- Northwest Bancshares, Inc. (the "Company") (NasdaqGS: NWBI) announced net income for the quarter ended March 31, 2021 of $40.2 million, or $0.32 per diluted share. This represents an increase of $32.3 million compared to the same quarter last year when net income was $7.9 million, or $0.07 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended March 31, 2021 were 10.61% and 1.17% compared to 2.37% and 0.30% for the same quarter last year.

The Company also announced that its Board of Directors increased the quarterly cash dividend by 5.3% to $0.20 per share payable on May 17, 2021 to shareholders of record as of May 6, 2021. This is the 106th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of March 31, 2021, this represents an annualized dividend yield of approximately 5.5%.

In making this announcement, Ronald J. Seiffert, Chairman, President and CEO, noted, "We are extremely pleased with the current quarter results beginning once again with strong fee income led by our mortgage banking operations. We are also delighted to report that our credit loss provision decreased significantly from prior year and prior quarter as we continue to see economic forecasts improve. From a credit quality perspective, delinquencies continue to be well maintained while payment deferrals on loans declined to just $53.8 million, or 0.5% of the loan portfolio, at March 31, 2021 as compared to $129.9 million at December 31, 2020. Despite the increase in nonperforming loans, or loans for which the accrual of interest has ceased, by $120.7 million during the quarter, classified loans declined from the December quarter by $21.6 million, or 4.4%, indicating that these potential problem loans had already previously been identified and an adequate reserve has already been allocated."

Mr. Seiffert continued, "During the first quarter, we also announced the divestiture of our insurance business to a very qualified and compassionate buyer in USI Insurance Services. As we assessed this business line for the past several years, it became clear that we were not going to be able to scale this business line in a meaningful way and that our resources and capital are better spent on our core banking businesses. The sale is expected to close during the second quarter."

Net interest income increased by $13.2 million, or 15.2%, to $100.5 million for the quarter ended March 31, 2021, from $87.2 million for the quarter ended March 31, 2020, largely due to a $7.3 million, or 7.7%, increase in interest income on loans receivable. This increase in interest income on loans was mainly due to an increase of $1.633 billion, or 18.6%, in the average balance of loans, primarily as a result of the acquisition of MutualBank during the second quarter of 2020. Also contributing to this increase in net interest income was a decrease of $5.9 million, or 51.6%, 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 0.33% for the quarter ended March 31, 2021 from 0.72% for the quarter ended March 31, 2020. Despite the overall increase in net interest income, net interest margin decreased to 3.18% for the quarter ended March 31, 2021 from 3.66% for the same quarter last year as interest earning asset yields decreased to 3.42% for the quarter ended March 31, 2021 from 4.21% for the quarter ended March 31, 2020. Contributing to the overall decline in average asset yield was the increase in average cash balances of $766.4 million, earning just 0.09%, due to deposit growth associated with Payroll Protection Program ("PPP") loan funds and consumer stimulus checks, as well as the overall decrease in market interest rates beginning with the decrease in the targeted federal funds rate of 1.25% by the Federal Reserve in March of 2020.

The provision for credit losses decreased by $33.3 million due to a current period credit of $5.6 million for the quarter ended March 31, 2021, compared to a provision expense of $27.6 million for the quarter ended March 31, 2020 because of a release in the allowance for credit losses due to continued improvements in economic forecasts. Total classified loans increased by $253.6 million to $467.7 million, or 4.51% of total loans, at March 31, 2021 from $214.1 million, or 2.42% of total loans, as of March 31, 2020. This increase was primarily due to the downgrade of commercial loans in certain industries impacted by COVID-19.

Noninterest income increased by $4.0 million, or 14.2%, to $32.0 million for the quarter ended March 31, 2021, from $28.0 million for the quarter ended March 31, 2020. This increase was primarily due to the increase in mortgage banking income of $4.8 million to $6.0 million for the quarter ended March 31, 2021 from $1.2 million for the quarter ended March 31, 2020. 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, trust and other financial services income increased $1.5 million, or 29.7%, as a result of additional fee income from the MutualBank acquisition. Slightly offsetting these increases was a decrease in service charges and fees of $2.7 million, or 18.0%, due to the impact of the Durbin amendment on our interchange fees which came into effect in the second half of 2020.

Noninterest expense increased by $7.6 million, or 9.6%, to $86.2 million for the quarter ended March 31, 2021, from $78.6 million for the quarter ended March 31, 2020. This increase resulted primarily from an increase of $4.5 million, or 10.5%, in compensation and employee benefits due primarily to the addition of MutualBank employees during the second quarter of 2020. Also contributing to this increase was an increase of $2.3 million, or 20.8%, in processing expenses as we continue to invest in technology and infrastructure and as activity-driven utilization fees for online and mobile banking has increased. Professional services expense increased $1.8 million, or 62.9%, due to the utilization of third-party experts to recruit talent and assist with our digital strategy rollout. Premises and occupancy costs increased $1.3 million, or 18.0%, over the prior year due primarily to additional snow removal costs. Lastly, Federal Deposit Insurance Corporation ("FDIC") insurance premiums increased $1.3 million due to assessment credits received in the previous year.

The provision for income taxes increased by $10.6 million to $11.6 million for the quarter ended March 31, 2021, from $1.0 million for the quarter ended March 31, 2020 due to higher income before income taxes.

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 March 31, 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.

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)

	March 31, 2021			December 31, 2020		March 31, 2020
Assets
Cash and cash equivalents	$	979,290		736,277		276,454
Marketable securities available-for-sale (amortized cost of $1,430,352, $1,375,685 and $749,703, respectively)	1,430,131			1,398,941		765,579
Marketable securities held-to-maturity (fair value of $593,232, $179,666 and $17,968, respectively)	604,284			178,887		17,208
Total cash and cash equivalents and marketable securities	3,013,705			2,314,105		1,059,241

Residential mortgage loans held-for-sale	46,270			58,786		6,426
Residential mortgage loans	2,925,408			3,009,335		2,831,860
Home equity loans	1,407,524			1,467,736		1,353,263
Consumer loans	1,554,355			1,507,993		1,178,055
Commercial real estate loans	3,289,436			3,345,889		2,755,468
Commercial loans	1,145,047			1,191,110		711,802
Total loans receivable	10,368,040			10,580,849		8,836,874
Allowance for credit losses	(123,997)			(134,427)		(92,897)
Loans receivable, net	10,244,043			10,446,422		8,743,977

FHLB stock, at cost	21,861			21,748		13,131
Accrued interest receivable	28,732			35,554		25,531
Real estate owned, net	1,738			2,232		1,075
Premises and equipment, net	158,784			161,538		147,427
Bank-owned life insurance	252,599			253,951		190,127
Goodwill	382,356			382,279		346,103
Other intangible assets, net	18,342			19,936		21,425
Other assets	148,196			168,503		133,159
Total assets	$	14,270,356		13,806,268		10,681,196
Liabilities and shareholders' equity
Liabilities
Noninterest-bearing demand deposits	$	3,000,019		2,716,224		1,736,622
Interest-bearing demand deposits	2,826,461			2,755,950		1,975,830
Money market deposit accounts	2,521,881			2,437,539		1,946,113
Savings deposits	2,229,214			2,047,424		1,640,414
Time deposits	1,535,519			1,642,096		1,493,756
Total deposits	12,113,094			11,599,233		8,792,735

Borrowed funds	253,617			283,044		191,599
Junior subordinated debentures	128,859			128,794		121,813
Advances by borrowers for taxes and insurance	44,024			45,230		47,154
Accrued interest payable	659			2,054		834
Other liabilities	189,109			209,210		185,269
Total liabilities	12,729,362			12,267,565		9,339,404
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, 127,222,648, 127,019,452, and 106,933,483 shares issued and outstanding, respectively	1,272			1,270		1,069
Additional paid-in capital	1,018,822			1,015,502		808,250
Retained earnings	571,612			555,480		561,380
Accumulated other comprehensive loss	(50,712)			(33,549)		(28,907)
Total shareholders' equity	1,540,994			1,538,703		1,341,792
Total liabilities and shareholders' equity	$	14,270,356		13,806,268		10,681,196

Equity to assets	10.80		%	11.14	%	12.56	%
Tangible common equity to assets*	8.22		%	8.48	%	9.45	%
Book value per share	$	12.11		12.11		12.55
Tangible book value per share*	$	8.96		8.95		9.11
Closing market price per share	$	14.45		12.74		11.57
Full time equivalent employees	2,443			2,421		2,223
Number of banking offices	170			170		178

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

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

	Quarter ended
	March 31, 2021			December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020
	March 31, 2021			December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020
Interest income:
Loans receivable	$	102,318		105,681		107,241		103,012		94,973
Mortgage-backed securities	4,200			4,551		4,652		4,038		4,175
Taxable investment securities	634			471		427		439		648
Tax-free investment securities	575			656		655		564		185
FHLB stock dividends	116			192		218		309		262
Interest-earning deposits	183			178		221		185		135
Total interest income	108,026			111,729		113,414		108,547		100,378
Interest expense:
Deposits	5,514			6,714		8,443		9,336		11,403
Borrowed funds	2,054			2,127		1,437		1,133		1,747
Total interest expense	7,568			8,841		9,880		10,469		13,150
Net interest income	100,458			102,888		103,534		98,078		87,228
Provision for credit losses	(5,620)			(2,230)		6,818		51,750		27,637
Net interest income after provision for credit losses	106,078			105,118		96,716		46,328		59,591
Noninterest income:
Gain/(loss) on sale of investments	(21)			75		(12)		(8)		181
Gain on sale of loans	—			—		—		—		1,302
Service charges and fees	12,394			13,074		14,354		13,069		15,116
Trust and other financial services income	6,484			5,722		5,376		4,823		5,001
Insurance commission income	2,546			2,034		2,331		2,395		2,372
Gain/(loss) on real estate owned, net	(42)			114		(32)		(97)		(91)
Income from bank-owned life insurance	1,736			1,330		1,576		1,248		1,036
Mortgage banking income	6,020			7,120		11,055		12,022		1,194
Other operating income	2,836			2,654		2,022		2,044		1,865
Total noninterest income	31,953			32,123		36,670		35,496		27,976
Noninterest expense:
Compensation and employee benefits	47,239			48,209		47,371		40,049		42,746
Premises and occupancy costs	8,814			7,614		8,342		7,195		7,471
Office operations	3,165			4,009		4,626		3,711		3,382
Collections expense	616			893		1,264		644		474
Processing expenses	13,456			12,186		15,042		11,680		11,142
Marketing expenses	1,980			1,994		2,147		2,047		1,507
Federal deposit insurance premiums	1,307			1,651		1,498		1,618		—
Professional services	4,582			3,599		3,246		2,825		2,812
Amortization of intangible assets	1,594			1,664		1,781		1,760		1,651
Real estate owned expense	75			64		111		89		95
Merger/asset disposition expense	9			7,238		1,414		9,679		2,458
Other expenses	3,354			3,728		27		7,866		4,873
Total noninterest expense	86,191			92,849		86,869		89,163		78,611
Income/(loss) before income taxes	51,840			44,392		46,517		(7,339)		8,956
Income tax expense/(benefit)	11,603			9,327		8,467		(1,139)		1,017
Net income/(loss)	$	40,237		35,065		38,050		(6,200)		7,939

Basic earnings/(loss) per share	$	0.32		0.28		0.30		(0.05)		0.08
Diluted earnings/(loss) per share	$	0.32		0.28		0.30		(0.05)		0.07

Weighted average common shares outstanding - basic	126,182,409			126,713,429		126,855,810		121,480,563		105,882,553
Weighted average common shares outstanding - diluted	126,700,024			126,728,602		126,855,810		121,480,563		106,148,247

Annualized return on average equity	10.61		%	9.00	%	9.82	%	(1.63)	%	2.37	%
Annualized return on average assets	1.17		%	1.01	%	1.09	%	(0.18)	%	0.30	%
Annualized return on tangible common equity **	14.31		%	12.27	%	13.28	%	(2.22)	%	3.28	%

Efficiency ratio *	63.88		%	62.18	%	59.68	%	58.19	%	64.67	%
Annualized noninterest expense to average assets *	2.45		%	2.42	%	2.39	%	2.30	%	2.83	%

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

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

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

	March 31, 2021			December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020
Nonaccrual loans current:
Residential mortgage loans	$	164		21		1,128		413		285
Home equity loans	268			154		366		481		592
Consumer loans	225			207		234		214		77
Commercial real estate loans	146,304			20,317		22,610		30,677		14,337
Commercial loans	6,361			16,027		6,488		6,551		3,514
Total nonaccrual loans current	$	153,322		36,726		30,826		38,336		18,805
Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans	$	1,261		647		60		61		691
Home equity loans	340			338		445		247		159
Consumer loans	254			301		230		335		143
Commercial real estate loans	965			1,416		692		2,372		496
Commercial loans	1,538			87		57		—		—
Total nonaccrual loans delinquent 30 days to 59 days	$	4,358		2,789		1,484		3,015		1,489
Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans	$	813		767		576		1,013		218
Home equity loans	417			190		618		960		539
Consumer loans	649			583		781		666		488
Commercial real estate loans	1,877			714		2,745		163		2,096
Commercial loans	7,919			48		15		768		37
Total nonaccrual loans delinquent 60 days to 89 days	$	11,675		2,302		4,735		3,570		3,378
Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans	$	9,333		14,489		14,750		15,369		10,457
Home equity loans	7,044			8,441		7,845		7,060		5,816
Consumer loans	3,625			5,473		5,352		6,896		3,459
Commercial real estate loans	29,737			25,287		35,496		29,729		25,342
Commercial loans	4,860			7,325		6,310		11,535		16,685
Total nonaccrual loans delinquent 90 days or more	$	54,599		61,015		69,753		70,589		61,759
Total nonaccrual loans	$	223,954		102,832		106,798		115,510		85,431
Total nonaccrual loans	$	223,954		102,832		106,798		115,510		85,431
Loans 90 days past due and still accruing	197			585		495		77		31
Nonperforming loans	224,151			103,417		107,293		115,587		85,462
Real estate owned, net	1,738			2,232		2,575		1,897		1,075
Nonperforming assets	$	225,889		105,649		109,868		117,484		86,537
Nonaccrual troubled debt restructuring *	$	7,390		10,704		17,120		17,562		17,375
Accruing troubled debt restructuring	20,120			21,431		17,684		17,888		15,977
Total troubled debt restructuring	$	27,510		32,135		34,804		35,450		33,352

Nonperforming loans to total loans	2.16		%	0.98	%	1.00	%	1.06	%	0.97	%
Nonperforming assets to total assets	1.58		%	0.77	%	0.80	%	0.85	%	0.81	%
Allowance for credit losses to total loans	1.20		%	1.27	%	1.30	%	1.29	%	1.05	%
Allowance for total loans excluding PPP loan balances	1.24		%	1.32	%	1.36	%	1.36	%	N/A
Allowance for credit losses to nonperforming loans	55.32		%	129.99	%	130.68	%	121.63	%	108.70	%

* Amounts included in nonperforming loans above.

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

At March 31, 2021	Pass		Special mention *	Substandard **	Doubtful *******	Loss	Loans receivable
Personal Banking:
Residential mortgage loans	$	2,950,103	—	21,575	—	—	2,971,678
Home equity loans	1,396,757		—	10,767	—	—	1,407,524
Consumer loans	1,547,502		—	6,853	—	—	1,554,355
Total Personal Banking	5,894,362		—	39,195	—	—	5,933,557
Commercial Banking:
Commercial real estate loans	2,801,082		120,345	368,009	—	—	3,289,436
Commercial loans	1,061,884		22,623	60,540	—	—	1,145,047
Total Commercial Banking	3,862,966		142,968	428,549	—	—	4,434,483
Total loans	$	9,757,328	142,968	467,744	—	—	10,368,040
At December 31, 2020
Personal Banking:
Residential mortgage loans	$	3,042,544	—	25,577	—	—	3,068,121
Home equity loans	1,455,474		—	12,262	—	—	1,467,736
Consumer loans	1,499,004		—	8,989	—	—	1,507,993
Total Personal Banking	5,997,022		—	46,828	—	—	6,043,850
Commercial Banking:
Commercial real estate loans	2,852,705		108,021	385,163	—	—	3,345,889
Commercial loans	1,092,498		41,278	57,334	—	—	1,191,110
Total Commercial Banking	3,945,203		149,299	442,497	—	—	4,536,999
Total loans	$	9,942,225	149,299	489,325	—	—	10,580,849
At September 30, 2020
Personal Banking:
Residential mortgage loans	$	3,117,442	—	25,927	—	—	3,143,369
Home equity loans	1,471,919		—	12,446	—	—	1,484,365
Consumer loans	1,478,109		—	8,974	—	—	1,487,083
Total Personal Banking	6,067,470		—	47,347	—	—	6,114,817
Commercial Banking:
Commercial real estate loans	2,850,611		110,073	359,059	—	—	3,319,743
Commercial loans	1,255,255		40,631	51,406	—	—	1,347,292
Total Commercial Banking	4,105,866		150,704	410,465	—	—	4,667,035
Total loans	$	10,173,336	150,704	457,812	—	—	10,781,852
At June 30, 2020
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 loans	3,034,984		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	$	10,448,035	114,213	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 loans	2,537,736		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


*	Includes $26.4 million, $31.3 million, $34.7 million, $37.4 million, and $13.1 million of acquired loans at March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, and March 31, 2020, respectively.
**	Includes $143.2 million, $153.2 million, $129.2 million, $108.2 million, and $56.8 million of acquired loans at March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, and March 31, 2020, respectively.
***	Includes $1.1 million of acquired loans at June 30, 2020.

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

	March 31, 2021			*		December 31, 2020			*		September 30, 2020			*		June 30, 2020			*		March 31, 2020			*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans	248	$	22,236	0.7	%	315	$	28,797	0.9	%	17	$	736	—	%	15	$	629	—	%	358	$	32,755	1.2	%
Home equity loans	84	3,334		0.2	%	138	4,763		0.3	%	129	4,984		0.3	%	118	4,569		0.3	%	190	7,061		0.5	%
Consumer loans	535	5,732		0.4	%	1,279	10,574		0.7	%	1,078	8,586		0.6	%	629	7,199		0.5	%	953	8,774		0.7	%
Commercial real estate loans	33	12,240		0.4	%	43	10,923		0.3	%	28	5,090		0.2	%	46	14,177		0.4	%	58	12,895		0.5	%
Commercial loans	16	3,032		0.3	%	37	6,405		0.5	%	19	1,797		0.1	%	12	1,242		0.1	%	35	7,545		1.1	%
Total loans delinquent 30 days to 59 days	916	$	46,574	0.4	%	1,812	$	61,462	0.6	%	1,271	$	21,193	0.2	%	820	$	27,816	0.3	%	1,594	$	69,030	0.8	%

Loans delinquent 60 days to 89 days:
Residential mortgage loans	26	$	2,062	0.1	%	84	$	5,083	0.2	%	65	$	4,788	0.2	%	64	$	5,364	0.2	%	11	$	511	—	%
Home equity loans	31	953		0.1	%	47	1,656		0.1	%	56	1,860		0.1	%	59	2,326		0.2	%	65	2,652		0.2	%
Consumer loans	169	1,868		0.1	%	322	2,742		0.2	%	323	3,049		0.2	%	258	2,916		0.2	%	265	2,610		0.2	%
Commercial real estate loans	14	7,609		0.2	%	11	1,615		—	%	14	4,212		0.1	%	18	3,913		0.1	%	12	2,981		0.1	%
Commercial loans	12	8,979		0.8	%	10	864		0.1	%	7	357		—	%	15	1,151		0.1	%	10	309		—	%
Total loans delinquent 60 days to 89 days	252	$	21,471	0.2	%	474	$	11,960	0.1	%	465	$	14,266	0.1	%	414	$	15,670	0.1	%	363	$	9,063	0.1	%

Loans delinquent 90 days or more: **
Residential mortgage loans	121	$	9,333	0.3	%	168	$	14,489	0.5	%	168	$	14,750	0.5	%	185	$	15,369	0.5	%	129	$	10,457	0.4	%
Home equity loans	176	7,044		0.5	%	207	8,441		0.6	%	193	7,845		0.5	%	182	7,060		0.5	%	152	5,816		0.4	%
Consumer loans	454	3,822		0.2	%	720	6,058		0.4	%	696	5,847		0.4	%	709	6,896		0.5	%	445	3,459		0.3	%
Commercial real estate loans	113	29,737		0.9	%	119	25,287		0.8	%	136	35,496		1.1	%	149	29,729		0.9	%	139	25,342		0.9	%
Commercial loans	31	4,860		0.4	%	37	7,325		0.6	%	34	6,310		0.5	%	47	11,535		0.8	%	51	16,685		0.2	%
Total loans delinquent 90 days or more	895	$	54,796	0.5	%	1,251	$	61,600	0.6	%	1,227	$	70,248	0.7	%	1,272	$	70,589	0.7	%	916	$	61,759	0.7	%

Total loans delinquent	2,063	$	122,841	1.2	%	3,537	$	135,022	1.3	%	2,963	$	105,707	1.0	%	2,506	$	114,075	1.1	%	2,873	$	139,852	1.6	%


*	Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
**	Includes purchased credit deteriorated loans of $12.7 million, $6.6 million, $20.3 million, $18.0 million, and $298,000 at March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, and March 31, 2020, 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 March 31, 2021:

At March 31, 2021	30-59 days delinquent		*		60-89 days delinquent			*		90 days or greater delinquent			*			Total delinquent			*			Current		*		Total loans receivable			*
Restaurants/bars	$	310	—	%	$	355		—	%	$	759		—	%		$	1,424		—	%		$	103,097	1.0	%	$	104,521		1.0	%
Hotels/hospitality	4,285		—	%	367			—	%	7,963			0.1	%		12,615			0.1	%		166,694		1.6	%	179,309			1.7	%
Gyms and fitness	—		—	%	—			—	%	—			—	%		—			—	%		4,590		—	%	4,590			—	%
Transportation	275		—	%	14			—	%	296			—	%		585			—	%		70,994		0.7	%	71,579			0.7	%
Oil and gas	—		—	%	—			—	%	—			—	%		—			—	%		9,200		0.1	%	9,200			0.1	%
Residential care facilities	1,250		—	%	—			—	%	—			—	%		1,250			—	%		246,561		2.4	%	247,811			2.4	%
Retail buildings	1,692		—	%	—			—	%	938			—	%		2,630			—	%		445,102		4.3	%	447,732			4.3	%
Education/student housing	—		—	%	1,389			—	%	441			—	%		1,830			—	%		138,536		1.3	%	140,366			1.4	%
Construction/development:
Education/student housing	—		—	%	—			—	%	—			—	%		—			—	%		53,903		0.5	%	53,903			0.5	%
Hotels/hospitality	—		—	%	—			—	%	—			—	%		—			—	%		25,639		0.2	%	25,639			0.2	%
Residential care facilities	3,450		—	%	—			—	%	—			—	%		3,450			—	%		30,144		0.3	%	33,594			0.3	%
All other construction/development	319		—	%	804			—	%	4,193			—	%		5,316			0.1	%		178,109		1.7	%	183,425			1.8	%
All other sectors	34,993		0.3	%	18,542			0.2	%	40,206			0.4	%		93,741			0.9	%		8,772,630		84.6	%	8,866,371			85.5	%
Total loans	$	46,574	0.4	%	$	21,471		0.2	%	$	54,796		0.5	%		$	122,841		1.2	%		$	10,245,199	98.8	%	$	10,368,040		100.0	%

* Percent of total loans outstanding.

Loan deferrals The following table represents loans that entered into and are currently in a deferment offered by the Company to aid customers in the COVID-19 pandemic as of March 31, 2021.

						Balance as of December 31, 2020						Loans returned to full payment status, net of payments						New loans entered into a deferral						Balance as of March 31, 2021
						Number of loans	Outstanding principal balance			*		Number of loans			Outstanding principal balance			Number of loans			Outstanding principal balance			Number of loans		Outstanding principal balance			*
Residential mortgage loans						43	$	6,442		0.2	%	42			$	6,119		29			$	4,484		30		$	4,807		0.2	%
Home equity loans						41	2,615			0.2	%	40			2,560			21			1,096			22		1,151			0.1	%
Consumer loans						83	1,299			0.1	%	83			1,299			21			546			21		546			—	%
Commercial real estate loans						34	118,212			3.5	%	29			80,666			20			6,068			25		43,614			1.3	%
Commercial loans						22	1,332			0.1	%	21			1,301			59			3,633			60		3,664			0.3	%
Total loans						223	$	129,900		1.2	%	215			$	91,945		150			$	15,827		158		$	53,782	**	0.5	%

* Percent of total loans outstanding by the respective total amount of that type of loan.
** As of March 31, 2021, $53.6 million of loan deferrals expire in Q2 2021 and $150,000 of loan deferrals expire in Q3 2021. Of the $53.8 total loan deferrals, $37.1 million are in the hospitality industry.

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

	Quarter ended
	March 31, 2021			December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020
Beginning balance	$	134,427		140,209		140,586		92,897		57,941
CECL adoption	—			—		—		—		10,792
Initial allowance on loans purchased with credit deterioration	—			—		—		8,845		—
Provision	(5,620)			(2,230)		6,818		51,750		27,637
Charge-offs residential mortgage	(855)			(407)		(129)		(38)		(343)
Charge-offs home equity	(228)			(58)		(88)		(173)		(289)
Charge-offs consumer	(2,603)			(2,623)		(3,356)		(3,191)		(3,488)
Charge-offs commercial real estate	(4,626)			(2,770)		(532)		(690)		(331)
Charge-offs commercial	(54)			(156)		(4,892)		(10,349)		(815)
Recoveries	3,556			2,462		1,802		1,535		1,793
Ending balance	$	123,997		134,427		140,209		140,586		92,897
Net charge-offs to average loans, annualized	0.19		%	0.13	%	0.27	%	0.51	%	0.16	%

	March 31, 2021
	Originated loans			Acquired loans		Total loans
	Balance		Reserve	Balance	Reserve	Balance	Reserve
Residential mortgage loans	$	2,693,075	5,117	278,603	744	2,971,678	5,861
Home equity loans	1,138,718		3,984	268,806	1,257	1,407,524	5,241
Consumer loans	1,351,401		15,026	202,954	2,425	1,554,355	17,451
Personal Banking Loans	5,183,194		24,127	750,363	4,426	5,933,557	28,553
Commercial real estate loans	2,568,567		60,874	720,869	16,085	3,289,436	76,959
Commercial loans	1,011,722		10,571	133,325	7,914	1,145,047	18,485
Commercial Banking Loans	3,580,289		71,445	854,194	23,999	4,434,483	95,444
Total Loans	$	8,763,483	95,572	1,604,557	28,425	10,368,040	123,997

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

The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages.

Quarter ended
	March 31, 2021					December 31, 2020					September 30, 2020					June 30, 2020					March 31, 2020
	Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)
Assets:
Interest-earning assets:
Residential mortgage loans	$	3,007,439	26,366	3.51	%	$	3,089,916	27,503	3.56	%	$	3,176,436	28,769	3.62	%	$	3,092,392	29,019	3.75	%	$	2,845,483	28,062	3.94	%
Home equity loans	1,432,009		12,815	3.63	%	1,472,527		13,535	3.66	%	1,479,429		13,732	3.69	%	1,415,091		13,806	3.92	%	1,345,059		14,801	4.43	%
Consumer loans	1,463,284		14,566	4.04	%	1,444,860		15,874	4.37	%	1,437,828		15,851	4.39	%	1,375,130		14,993	4.39	%	1,123,336		12,160	4.35	%
Commercial real estate loans	3,313,892		38,471	4.64	%	3,317,418		37,965	4.48	%	3,306,386		36,887	4.37	%	3,156,749		34,595	4.34	%	2,747,419		31,437	4.53	%
Commercial loans	1,189,812		10,566	3.55	%	1,325,047		11,414	3.37	%	1,377,223		12,603	3.58	%	1,161,228		11,269	3.84	%	712,621		8,856	4.92	%
Total loans receivable (a) (b) (d)	10,406,436		102,784	4.01	%	10,649,768		106,291	3.97	%	10,777,302		107,842	3.98	%	10,200,590		103,682	4.09	%	8,773,918		95,316	4.37	%
Mortgage-backed securities (c)	1,324,558		4,200	1.27	%	1,166,739		4,551	1.56	%	1,004,803		4,651	1.85	%	714,657		4,038	2.26	%	668,470		4,175	2.50	%
Investment securities (c) (d)	331,358		1,381	1.67	%	252,898		1,380	2.18	%	216,081		1,336	2.47	%	170,309		1,244	2.92	%	144,152		881	2.44	%
FHLB stock, at cost	21,811		116	2.17	%	23,346		192	3.27	%	25,595		218	3.39	%	22,192		309	5.60	%	15,931		262	6.61	%
Other interest-earning deposits	801,119		183	0.09	%	632,494		178	0.11	%	791,601		221	0.11	%	623,870		185	0.12	%	34,697		135	1.54	%
Total interest-earning assets	12,885,282		108,664	3.42	%	12,725,245		112,592	3.52	%	12,815,382		114,268	3.55	%	11,731,618		109,458	3.75	%	9,637,168		100,769	4.21	%
Noninterest-earning assets (e)	1,102,477					1,066,609					1,088,273					1,858,513					960,303
Total assets	$	13,987,759				$	13,791,854				$	13,903,655				$	13,590,131				$	10,597,471
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings deposits	$	2,118,030	625	0.12	%	$	2,028,155	617	0.12	%	$	2,015,604	648	0.13	%	$	1,884,202	648	0.14	%	$	1,611,111	727	0.18	%
Interest-bearing demand deposits	2,783,429		429	0.06	%	2,699,515		476	0.07	%	2,680,591		763	0.11	%	2,428,060		812	0.13	%	1,915,871		1,307	0.27	%
Money market deposit accounts	2,497,495		657	0.11	%	2,426,513		960	0.16	%	2,347,097		1,347	0.23	%	2,204,810		1,600	0.29	%	1,921,243		3,088	0.65	%
Time deposits	1,583,525		3,803	0.97	%	1,676,094		4,660	1.11	%	1,782,350		5,685	1.27	%	1,761,260		6,276	1.43	%	1,528,891		6,281	1.65	%
Borrowed funds (f)	267,163		1,412	2.14	%	352,392		1,469	1.66	%	420,715		717	0.68	%	371,700		296	0.32	%	240,118		709	1.19	%
Junior subordinated debentures	128,817		642	1.99	%	128,752		659	2.00	%	128,658		720	2.19	%	127,472		837	2.60	%	121,809		1,038	3.37	%
Total interest-bearing liabilities	9,378,459		7,568	0.33	%	9,311,421		8,841	0.38	%	9,375,015		9,880	0.42	%	8,777,504		10,469	0.48	%	7,339,043		13,150	0.72	%
Noninterest-bearing demand deposits (g)	2,805,206					2,675,986					2,703,266					2,401,368					1,640,180
Noninterest-bearing liabilities	265,667					253,966					284,440					882,391					268,139
Total liabilities	12,449,332					12,241,373					12,362,721					12,061,263					9,247,362
Shareholders' equity	1,538,427					1,550,481					1,540,934					1,528,868					1,350,109
Total liabilities and shareholders' equity	$	13,987,759				$	13,791,854				$	13,903,655				$	13,590,131				$	10,597,471
Net interest income/Interest rate spread			101,096	3.09	%			103,751	3.14	%			104,388	3.13	%			98,989	3.27	%			87,619	3.48	%
Net interest-earning assets/Net interest margin	$	3,506,823		3.18	%	$	3,413,824		3.26	%	$	3,440,367		3.26	%	$	2,954,114		3.38	%	$	2,298,125		3.66	%
Ratio of interest-earning assets to interest-bearing liabilities	1.37X					1.37X					1.37X					1.34X					1.31X


(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, collateralized borrowings and subordinated debt.
(g)	Average cost of deposits were 0.19%, 0.23%, 0.29%, 0.35%, and 0.53%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 3.99%, 3.94%, 3.96%, 4.06%, and 4.35%, respectively, Investment securities - 1.46%, 1.78%, 2.00%, 2.36%, and 2.31%, respectively, Interest-earning assets - 3.40%, 3.48%, 3.52%, 3.72%, and 4.19%, respectively. GAAP basis net interest rate spreads were 3.07%, 3.11%, 3.10%, 3.24%, and 3.47%, respectively, and GAAP basis net interest margins were 3.16%, 3.23%, 3.23%, 3.34%, and 3.64%, respectively.