Northwest Bancshares, Inc. Announces Second Quarter 2019 Earnings and Quarterly Dividend

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Jul 22, 2019, 09:00 ET

WARREN, Pa., July 22, 2019 /PRNewswire/ -- Northwest Bancshares, Inc., (the "Company"), (NasdaqGS: NWBI) announced net income for the quarter ended June 30, 2019 of $26.4 million, or $0.25 per diluted share. This represents an increase of $84,000, or 0.3%, compared to the same quarter last year when net income was $26.3 million or $0.25 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended June 30, 2019 were 8.01% and 1.02% compared to 8.67% and 1.11% for the same quarter last year.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.18 per share payable on August 15, 2019 to shareholders of record as of August 1, 2019. This is the 99th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's stock as of June 30, 2019, this represents an annualized dividend yield of approximately 4.09%.

In making this announcement, Ronald J. Seiffert, Chairman, President and CEO, noted, "We were extremely pleased with loan growth for both the current quarter of 1.9% and for the first six months of the year of 3.5%." Mr. Seiffert added that "despite the expected six basis point decline in our net interest margin during the quarter due to the shape of the yield curve, we believe it is very important to continue to grow and diversify our loan portfolio." He continued, "As the result of strategic investments that we made during the first half of this year, we are extremely well-positioned to focus on sales execution and operating efficiencies for the remainder of 2019. These investments included the successful integration of Union Community Bank, the implementation of nCino as our new commercial loan origination platform and Ellie Mae's Encompass as our new residential mortgage loan origination platform, as well as the staffing of our commercial and residential mortgage loan origination teams."

Net interest income increased by $8.4 million, or 10.0%, to $92.6 million for the quarter ended June 30, 2019, from $84.2 million for the quarter ended June 30, 2018, primarily due to a $12.8 million, or 14.5%, increase in interest income on loans receivable and a $1.0 million, or 31.5%, increase in interest income on mortgage-backed securities. These increases were primarily due to increases of $743.4 million, or 9.5%, and $75.0 million, or 13.2%, in the average balances of loans and mortgage-backed securities, respectively. Additionally, the average yield on loans and mortgage-backed securities increased by 21 and 37 basis points, respectively, over the prior year period. Partially offsetting this improvement was an increase in interest expense on deposits of $5.2 million, or 70.8%, due to increases in market interest rates that have occurred over the past year. The net impact of these changes caused the Company's net interest margin to increase to 3.91% for the quarter ended June 30, 2019 from 3.86% for the same quarter last year.

The provision for loan losses decreased by $682,000, or 12.8%, to $4.7 million for the quarter ended June 30, 2019, from $5.3 million for the quarter ended June 30, 2018. The provision was elevated in the prior year due primarily to the closure of the Company's consumer finance subsidiary and the runoff of the legacy portfolio. During the current quarter, net charge-offs were elevated due to an additional write down of approximately $4.0 million on a residential land development loan in our Western New York region. This write down was previously fully reserved.

Noninterest income decreased by $746,000, or 3.1%, to $23.4 million for the quarter ended June 30, 2019, from $24.1 million for the quarter ended June 30, 2018. This decrease was primarily due to a $1.1 million, or 48.7%, decline in bank owned life insurance income due to a death benefit received during the prior year. Partially offsetting this decline was an increase in service charges and fees of $431,000, or 3.3%, to $13.3 million for the current quarter compared to $12.9 million for the prior year's quarter, primarily as a result of increased customer activity from the United Community Bank ("UCB") acquisition. Additionally, there was an increase in trust and other financial services income of $394,000, or 9.7%, to $4.4 million for the quarter ended June 30, 2019, from $4.0 million for the same quarter last year primarily due to new brokerage production.

Noninterest expense increased by $7.7 million, or 11.1%, to $77.5 million for the quarter ended June 30, 2019, from $69.8 million for the quarter ended June 30, 2018. This increase resulted primarily from a $3.0 million, or 7.6%, increase in compensation and employee benefits due to both internal growth in compensation and staff as well as the addition of UCB employees. In addition, processing expenses increased by $1.1 million, or 11.2%, as we continue to invest in technology and infrastructure to meet the demands of becoming a $10.0 billion institution. Also contributing to this increase was an increase in restructuring and acquisition expense of $712,000 due to expenses incurred as part of the UCB acquisition.

Net income for the six month period ended June 30, 2019 was $51.4 million, or $0.49 per diluted share. This represents an increase of $143,000, or 0.3%, compared to the six month period ended June 30, 2018, when net income was $51.3 million, or $0.50 per diluted share. The annualized returns on average shareholders' equity and average assets for the six month period ended June 30, 2019 were 7.99% and 1.02% compared to 8.54% and 1.09% for the same period last year. This increase in net income was the result of an increase in net interest income after provision of $13.0 million, or 8.3% which was partially offset by an increase in noninterest expense of $11.7 million, or 8.5%. Contributing to the additional expense is the added cost of the Union Community Bank operations, including new marketing costs, additional processing costs associated with our new commercial and residential mortgage platforms as well as increased online banking usage fees, and the acquisition costs associated with the Union Community Bank conversion in March 2019.

Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Bank. Founded in 1896, Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, employee benefits and wealth management services, as well as the fulfillment of business and personal insurance needs. Northwest operates 172 full-service community banking offices and ten free standing drive-through facilities in Pennsylvania, New York and Ohio. 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; and (7) increased risk associated with commercial real-estate and business loans. Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.

Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Financial Condition (Unaudited)
(Dollars in thousands, except per share amounts)

	June 30, 2019			December 31, 2018			June 30, 2018
Assets
Cash and cash equivalents	$	106,988		68,789			133,045
Marketable securities available-for-sale (amortized cost of $850,248, $811,015 and $814,848, respectively)	854,765			801,450			799,878
Marketable securities held-to-maturity (fair value of $20,676, $22,446 and $25,212, respectively)	20,414			22,765			25,747
Total cash and cash equivalents and marketable securities	982,167			893,004			958,670

Residential mortgage loans	2,899,164			2,864,470			2,800,668
Home equity loans	1,314,947			1,258,422			1,276,181
Consumer loans	1,011,424			859,713			700,925
Commercial real estate loans	2,808,153			2,471,821			2,553,223
Commercial loans	703,194			597,013			611,373
Total loans receivable	8,736,882			8,051,439			7,942,370
Allowance for loan losses	(53,107)			(55,214)			(57,332)
Loans receivable, net	8,683,775			7,996,225			7,885,038

Federal Home Loan Bank stock, at cost	14,966			15,635			7,887
Accrued interest receivable	28,742			24,490			24,959
Real estate owned, net	2,070			2,498			2,722
Premises and equipment, net	148,973			143,390			146,276
Bank owned life insurance	186,870			171,079			170,791
Goodwill	344,720			307,420			307,420
Other intangible assets	24,112			19,821			22,629
Other assets	89,088			34,211			35,917
Total assets	$	10,505,483		9,607,773			9,562,309

Liabilities and shareholders' equity
Liabilities
Noninterest-bearing demand deposits	$	1,944,550		1,736,156			1,732,664
Interest-bearing demand deposits	1,670,983			1,455,460			1,485,938
Money market deposit accounts	1,784,437			1,661,623			1,686,052
Savings deposits	1,683,551			1,636,099			1,697,396
Time deposits	1,600,372			1,404,841			1,405,328
Total deposits	8,683,893			7,894,179			8,007,378

Borrowed funds	171,677			234,389			99,889
Advances by borrowers for taxes and insurance	54,507			43,298			51,640
Accrued interest payable	1,207			744			568
Other liabilities	138,854			66,312			62,741
Junior subordinated debentures	121,757			111,213			111,213
Total liabilities	9,171,895			8,350,135			8,333,429

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, 106,614,607, 103,354,030, and 103,122,890 shares issued and outstanding, respectively	1,066			1,034			1,031
Paid-in-capital	798,942			745,926			739,673
Retained earnings	562,799			550,374			531,269
Accumulated other comprehensive loss	(29,219)			(39,696)			(43,093)
Total shareholders' equity	1,333,588			1,257,638			1,228,880
Total liabilities and shareholders' equity	$	10,505,483			9,607,773			9,562,309

Equity to assets	12.69		%	13.09		%	12.85		%
Tangible common equity to assets	9.52		%	10.03		%	9.74		%
Book value per share	$	12.51		12.17			11.92
Tangible book value per share	$	9.05		9.00			8.72
Closing market price per share	$	17.61		16.94			17.39
Full time equivalent employees	2,238			2,128			2,118
Number of banking offices	182			172			172

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

	Quarter ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2019			2019			2018			2018			2018
Interest income:
Loans receivable	$	100,917		94,935			92,512			90,733			88,106
Mortgage-backed securities	4,280			3,965			3,942			3,572			3,254
Taxable investment securities	898			936			924			814			648
Tax-free investment securities	237			182			170			205			313
FHLB dividends	316			171			151			119			85
Interest-earning deposits	159			100			69			162			469
Total interest income	106,807			100,289			97,768			95,605			92,875

Interest expense:
Deposits	12,484			10,145			8,985			8,233			7,309
Borrowed funds	1,720			2,162			1,952			1,555			1,340
Total interest expense	14,204			12,307			10,937			9,788			8,649

Net interest income	92,603			87,982			86,831			85,817			84,226
Provision for loan losses	4,667			6,467			3,792			6,982			5,349
Net interest income after provision for loan losses	87,936			81,515			83,039			78,835			78,877

Noninterest income:
Gain/(loss) on sale of investments	29			(6)			4			—			—
Service charges and fees	13,339			12,043			12,827			13,158			12,908
Trust and other financial services income	4,444			4,195			4,246			4,254			4,050
Insurance commission income	2,145			2,178			1,906			2,046			2,090
Gain/(loss) on real estate owned, net	91			(3)			(14)			(247)			176
Income from bank owned life insurance	1,197			1,005			1,038			1,460			2,333
Mortgage banking income	188			216			213			82			77
Other operating income	1,930			2,034			3,028			1,804			2,475
Total noninterest income	23,363			21,662			23,248			22,557			24,109

Noninterest expense:
Compensation and employee benefits	42,008			38,188			39,319			37,535			39,031
Premises and occupancy costs	7,387			7,218			6,567			6,821			6,824
Office operations	3,708			3,131			3,455			3,508			3,768
Collections expense	939			308			780			483			434
Processing expenses	10,634			10,434			10,160			9,620			9,560
Marketing expenses	2,729			1,886			2,331			1,949			2,014
Federal deposit insurance premiums	681			706			637			721			671
Professional services	3,198			2,524			3,134			2,368			2,819
Amortization of intangible assets	1,760			1,447			1,346			1,462			1,520
Real estate owned expense	128			159			187			205			133
Restructuring/acquisition expense	1,105			1,926			435			186			393
Other expense	3,235			3,497			3,922			1,759			2,620
Total noninterest expense	77,512			71,424			72,273			66,617			69,787
Income before income taxes	33,787			31,753			34,014			34,775			33,199

Income tax expense	7,404			6,709			7,547			7,035			6,900
Net income	$	26,383		25,044			26,467			27,740			26,299

Basic earnings per share	$	0.25		0.24			0.26			0.27			0.26
Diluted earnings per share	$	0.25		0.24			0.26			0.27			0.25

Weighted average common shares outstanding - basic		105,233,635			103,101,789			102,479,086			102,334,954			101,870,043
Weighted average common shares outstanding - diluted		106,258,215			104,496,592			103,749,383			103,942,695			103,424,154

Annualized return on average equity	8.01		%	7.96		%	8.44		%	8.93		%	8.67		%
Annualized return on average assets	1.02		%	1.03		%	1.09		%	1.15		%	1.11		%
Annualized return on tangible common equity	10.97		%	10.74		%	11.29		%	12.07		%	11.74		%

Efficiency ratio *	64.37		%	62.07		%	64.04		%	59.95		%	62.65		%
Annualized noninterest expense to average assets *	2.88		%	2.79		%	2.91		%	2.70		%	2.87		%
* Excludes restructuring/acquisition expenses and amortization of intangible assets (non-GAAP).

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

	Six months ended June 30,
	2019			2018
Interest income:
Loans receivable	$	195,852		173,326
Mortgage-backed securities	8,245			6,267
Taxable investment securities	1,834			1,326
Tax-free investment securities	419			703
FHLB dividends	487			182
Interest-earning deposits	259			604
Total interest income	207,096			182,408

Interest expense:
Deposits	22,629			13,767
Borrowed funds	3,882			2,648
Total interest expense	26,511			16,415

Net interest income	180,585			165,993
Provision for loan losses	11,134			9,558
Net interest income after provision for loan losses	169,451			156,435

Noninterest income:
Gain on sale of investments	23			153
Service charges and fees	25,382			24,807
Trust and other financial services income	8,639			8,081
Insurance commission income	4,323			4,839
Gain/(loss) on real estate owned, net	88			(370)
Income from bank owned life insurance	2,202			3,323
Mortgage banking income	404			301
Other operating income	3,964			4,763
Total noninterest income	45,025			45,897

Noninterest expense:
Compensation and employee benefits	80,196			75,541
Premises and occupancy costs	14,605			14,131
Office operations	6,839			7,176
Collections expense	1,247			946
Processing expenses	21,068			19,266
Marketing expenses	4,615			4,154
Federal deposit insurance premiums	1,387			1,388
Professional services	5,722			5,096
Amortization of intangible assets	3,207			3,040
Real estate owned expense	287			425
Restructuring/acquisition expense	3,031			393
Other expense	6,732			5,652
Total noninterest expense	148,936			137,208
Income before income taxes	65,540			65,124

Income tax expense	14,113			13,840
Net income	$	51,427		51,284

Basic earnings per share	$	0.49		0.50
Diluted earnings per share	$	0.49		0.50

Weighted average common shares outstanding - basic		104,173,601			101,735,235
Weighted average common shares outstanding - diluted	105,382,270				103,281,120

Annualized return on average equity	7.99		%	8.54		%
Annualized return on average assets	1.02		%	1.09		%
Annualized return on tangible common equity	10.75		%	11.51		%

Efficiency ratio *	63.25		%	63.13		%
Annualized noninterest expense to average assets *	2.84		%	2.85		%
* Excludes restructuring/acquisition expenses and amortization of intangible assets (non-GAAP).

Northwest Bancshares, Inc. and Subsidiaries
Asset quality (Unaudited)
(Dollars in thousands)

	June 30, 2019			March 31, 2019		December 31, 2018		September 30, 2018		June 30, 2018
Nonaccrual loans current:
Residential mortgage loans	$	432		124		264		869		669
Home equity loans	475			643		437		496		237
Consumer loans	94			76		196		126		218
Commercial real estate loans	12,605			10,520		9,947		10,905		14,814
Commercial loans	5,666			4,277		4,736		1,972		2,559
Total nonaccrual loans current	$	19,272		15,640		15,580		14,368		18,497

Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans	$	13		824		1,358		15		89
Home equity loans	418			160		266		333		221
Consumer loans	172			154		294		182		192
Commercial real estate loans	469			2,642		219		3,124		522
Commercial loans	45			321		23		150		51
Total nonaccrual loans delinquent 30 days to 59 days	$	1,117		4,101		2,160		3,804		1,075

Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans	$	910		1,323		1,262		547		668
Home equity loans	717			954		376		418		483
Consumer loans	322			683		582		464		194
Commercial real estate loans	1,426			3,588		1,260		1,872		1,682
Commercial loans	780			397		332		352		380
Total nonaccrual loans delinquent 60 days to 89 days	$	4,155		6,945		3,812		3,653		3,407

Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans	$	10,617		10,781		12,965		13,154		11,822
Home equity loans	5,591			5,542		5,996		5,838		6,729
Consumer finance loans	10			—		22		39		15
Consumer loans	2,892			3,215		3,228		3,535		2,626
Commercial real estate loans	21,123			24,528		25,509		27,122		15,617
Commercial loans	2,920			2,027		3,010		2,714		2,925
Total nonaccrual loans delinquent 90 days or more	$	43,153		46,093		50,730		52,402		39,734

Total nonaccrual loans	$	67,697		72,779		72,282		74,227		62,713

Total nonaccrual loans	$	67,697		72,779		72,282		74,227		62,713
Loans 90 days past maturity and still accruing	55			166		166		195		94
Nonperforming loans	67,752			72,945		72,448		74,422		62,807
Real estate owned, net	2,070			2,345		2,498		2,486		2,722
Nonperforming assets	$	69,822		75,290		74,946		76,908		65,529

Nonaccrual troubled debt restructuring *	$	13,375		14,951		15,306		9,777		10,860
Accruing troubled debt restructuring	17,894			17,861		18,302		19,370		19,802
Total troubled debt restructuring	$	31,269		32,812		33,608		29,147		30,662

Nonperforming loans to total loans	0.78		%	0.85	%	0.90	%	0.93	%	0.79	%
Nonperforming assets to total assets	0.66		%	0.73	%	0.78	%	0.80	%	0.69	%
Allowance for loan losses to total loans	0.61		%	0.65	%	0.69	%	0.70	%	0.72	%
Allowance for loan losses to nonperforming loans	78.38		%	76.39	%	76.21	%	75.21	%	91.28	%
* Amounts included in nonperforming loans above.

	Northwest Bancshares, Inc. and Subsidiaries
	Loans by credit quality indicators (Unaudited)
	(Dollars in thousands)

	At June 30, 2019	Pass		Special mention *	Substandard **	Doubtful	Loss	Loans receivable
	Personal Banking:
	Residential mortgage loans	$	2,890,472	—	8,692	—	—	2,899,164
	Home equity loans	1,307,887		—	7,060	—	—	1,314,947
	Consumer loans	1,007,813		—	3,611	—	—	1,011,424
	Total Personal Banking	5,206,172		—	19,363	—	—	5,225,535
	Commercial Banking:
	Commercial real estate loans	2,586,013		86,434	135,525	181	—	2,808,153
	Commercial loans	621,889		38,182	42,141	982	—	703,194
	Total Commercial Banking	3,207,902		124,616	177,666	1,163	—	3,511,347
	Total loans	$	8,414,074	124,616	197,029	1,163	—	8,736,882

	At March 31, 2019
	Personal Banking:
	Residential mortgage loans	$	2,858,007	—	9,154	—	—	2,867,161
	Home equity loans	1,317,323		—	7,082	—	—	1,324,405
	Consumer loans	926,832		—	4,230	—	—	931,062
	Total Personal Banking	5,102,162		—	20,466	—	—	5,122,628
	Commercial Banking:
	Commercial real estate loans	2,577,176		87,053	135,080	—	—	2,799,309
	Commercial loans	573,160		34,610	40,168	—	—	647,938
	Total Commercial Banking	3,150,336		121,663	175,248	—	—	3,447,247
	Total loans	$	8,252,498	121,663	195,714	—	—	8,569,875

	At December 31, 2018
	Personal Banking:
	Residential mortgage loans	$	2,853,460	—	11,010	—	—	2,864,470
	Home equity loans	1,251,518		—	6,904	—	—	1,258,422
	Consumer loans	855,277		—	4,436	—	—	859,713
	Total Personal Banking	4,960,255		—	22,350	—	—	4,982,605
	Commercial Banking:
	Commercial real estate loans	2,254,350		94,688	122,783	—	—	2,471,821
	Commercial loans	538,762		19,281	38,970	—	—	597,013
	Total Commercial Banking	2,793,112		113,969	161,753	—	—	3,068,834
	Total loans	$	7,753,367	113,969	184,103	—	—	8,051,439

	At September 30, 2018
	Personal Banking:
	Residential mortgage loans	$	2,835,806	—	11,028	—	—	2,846,834
	Home equity loans	1,265,237		—	7,108	—	—	1,272,345
	Consumer loans	771,555		—	4,494	—	—	776,049
	Total Personal Banking	4,872,598		—	22,630	—	—	4,895,228
	Commercial Banking:
	Commercial real estate loans	2,283,152		53,529	181,385	—	—	2,518,066
	Commercial loans	526,584		24,760	31,424	—	—	582,768
	Total Commercial Banking	2,809,736		78,289	212,809	—	—	3,100,834
	Total loans	$	7,682,334	78,289	235,439	—	—	7,996,062

	At June 30, 2018
	Personal Banking:
	Residential mortgage loans	$	2,790,906	—	9,762	—	—	2,800,668
	Home equity loans	1,268,884		—	7,297	—	—	1,276,181
	Consumer loans	697,561		—	3,364	—	—	700,925
	Total Personal Banking	4,757,351		—	20,423	—	—	4,777,774
	Commercial Banking:
	Commercial real estate loans	2,294,327		65,698	193,198	—	—	2,553,223
	Commercial loans	554,495		18,140	38,738	—	—	611,373
	Total Commercial Banking	2,848,822		83,838	231,936	—	—	3,164,596
	Total loans	$	7,606,173	83,838	252,359	—	—	7,942,370
*	Includes $8.1 million, $3.4 million, $7.1 million, $9.2 million and $9.5 million of acquired loans at June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018, and June 30, 2018, respectively.
**	Includes $38.6 million, $37.8 million, $39.3 million, $45.3 million and $44.5 million of acquired loans at June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018, and June 30, 2018, respectively.

Northwest Bancshares, Inc. and Subsidiaries
Loan delinquency (Unaudited)
(Dollars in thousands)

	June 30, 2019			*		March 31, 2019			*		December 31, 2018			*		September 30, 2018			*		June 30, 2018			*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans	30	$	1,629	0.1	%	311	$	28,009	1.0	%	333	$	27,777	1.0	%	27	$	1,500	0.1	%	30	$	1,561	0.1	%
Home equity loans	148	4,573		0.3	%	195	7,626		0.6	%	233	8,649		0.7	%	184	5,673		0.4	%	184	6,383		0.5	%
Consumer finance loans	75	130		9.0	%	128	295		12.9	%	327	661		17.3	%	280	632		10.7	%	306	711		8.1	%
Consumer loans	781	7,500		0.7	%	777	7,228		0.8	%	1,073	9,447		1.1	%	984	8,408		1.1	%	901	8,855		1.3	%
Commercial real estate loans	31	2,418		0.1	%	48	28,965		1.0	%	37	5,503		0.2	%	36	5,386		0.2	%	40	5,898		0.2	%
Commercial loans	14	666		0.1	%	30	3,359		0.5	%	21	973		0.2	%	17	622		0.1	%	24	1,000		0.2	%
Total loans delinquent 30 days to 59 days	1,079	$	16,916	0.2	%	1,489	$	75,482	0.9	%	2,024	$	53,010	0.7	%	1,528	$	22,221	0.3	%	1,485	$	24,408	0.3	%

Loans delinquent 60 days to 89 days:
Residential mortgage loans	78	$	6,264	0.2	%	29	$	2,602	0.1	%	71	$	6,425	0.2	%	61	$	4,704	0.2	%	62	$	5,847	0.2	%
Home equity loans	59	2,319		0.2	%	53	2,544		0.2	%	63	2,065		0.2	%	69	2,536		0.2	%	73	2,495		0.2	%
Consumer finance loans	25	44		3.0	%	28	47		2.1	%	86	172		4.5	%	112	234		4.0	%	127	277		3.2	%
Consumer loans	313	2,853		0.3	%	271	2,130		0.2	%	389	3,042		0.4	%	352	3,251		0.4	%	350	2,654		0.4	%
Commercial real estate loans	16	2,617		0.1	%	17	4,064		0.1	%	24	5,387		0.2	%	30	6,678		0.3	%	28	3,689		0.1	%
Commercial loans	16	1,725		0.2	%	7	738		0.1	%	8	560		0.1	%	21	1,104		0.2	%	15	926		0.2	%
Total loans delinquent 60 days to 89 days	507	$	15,822	0.2	%	405	$	12,125	0.2	%	641	$	17,651	0.2	%	645	$	18,507	0.2	%	655	$	15,888	0.2	%

Loans delinquent 90 days or more: **
Residential mortgage loans	129	$	10,800	0.4	%	113	$	10,801	0.4	%	145	$	12,985	0.5	%	143	$	13,483	0.5	%	140	$	12,293	0.4	%
Home equity loans	136	5,591		0.4	%	155	5,542		0.4	%	161	6,037		0.5	%	150	5,838		0.5	%	154	6,768		0.5	%
Consumer finance loans	5	10		0.7	%	—	—		—	%	6	21		0.6	%	16	39		0.7	%	8	15		0.2	%
Consumer loans	705	2,898		0.3	%	764	3,221		0.3	%	432	3,233		0.4	%	766	3,541		0.5	%	302	2,633		0.4	%
Commercial real estate loans	118	21,123		0.7	%	125	24,589		0.9	%	128	25,587		1.0	%	126	27,228		1.1	%	113	15,772		0.6	%
Commercial loans	25	2,920		0.4	%	23	2,027		0.3	%	29	3,010		0.5	%	29	2,714		0.5	%	31	2,925		0.5	%
Total loans delinquent 90 days or more	1,118	$	43,342	0.5	%	1,180	$	46,180	0.6	%	901	$	50,873	0.6	%	1,230	$	52,843	0.7	%	748	$	40,406	0.5	%

Total loans delinquent	2,704	$	76,080	0.9	%	3,074	$	133,787	1.6	%	3,566	$	121,534	1.5	%	3,403	$	93,571	1.2	%	2,888	$	80,702	1.0	%
* Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
** Includes purchased credit impaired loans of $190,000, $87,000, $145,000, $440,000, and $672,000 at June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018 and June 30, 2018, respectively.

Northwest Bancshares, Inc. and Subsidiaries
Allowance for loan losses (Unaudited)
(Dollars in thousands)

			Quarter ended
			June 30, 2019			March 31, 2019		December 31, 2018			September 30, 2018		June 30, 2018
Beginning balance			$	55,721		55,214		55,975			57,332		55,211
Provision			4,667			6,467		3,792			6,982		5,349
Charge-offs residential mortgage			(397)			(357)		(375)			(214)		(389)
Charge-offs home equity			(389)			(153)		(341)			(426)		(406)
Charge-offs consumer finance			(58)			(179)		(329)			(445)		(486)
Charge-offs consumer			(2,508)			(2,842)		(3,751)			(3,470)		(2,682)
Charge-offs commercial real estate			(4,367)			(604)		(1,538)			(4,859)		(439)
Charge-offs commercial			(1,087)			(3,270)		(824)			(985)		(491)
Recoveries			1,525			1,445		2,605			2,060		1,665
Ending balance			$	53,107		55,721		55,214			55,975		57,332

Net charge-offs to average loans, annualized			0.34		%	0.29	%	0.23	%		0.42	%	0.16	%

										Six months ended June 30,
										2019			2018
Beginning balance										$	55,214		56,795
Provision										11,134			9,558
Charge-offs residential mortgage										(754)			(590)
Charge-offs home equity										(542)			(1,017)
Charge-offs consumer finance										(237)			(2,039)
Charge-offs consumer										(5,350)			(5,931)
Charge-offs commercial real estate										(4,971)			(990)
Charge-offs commercial										(4,357)			(1,516)
Recoveries										2,970			3,062
Ending balance										$	53,107		57,332

Net charge-offs to average loans, annualized										0.32		%	0.23	%

	June 30, 2019
	Originated loans					Acquired loans					Total loans
	Balance			Reserve		Balance		Reserve			Balance		Reserve
Residential mortgage loans	$	2,812,937		3,909		86,227		104			2,899,164		4,013
Home equity loans	1,041,302			2,990		273,645		344			1,314,947		3,334
Legacy consumer finance loans	1,449			266		—		—			1,449		266
Consumer loans	964,149			10,500		45,826		511			1,009,975		11,011
Personal Banking Loans	4,819,837			17,665		405,698		959			5,225,535		18,624

Commercial real estate loans	2,336,416			20,962		471,737		2,571			2,808,153		23,533
Commercial loans	639,886			9,802		63,308		1,148			703,194		10,950
Commercial Banking Loans	2,976,302			30,764		535,045		3,719			3,511,347		34,483

Total Loans	$	7,796,139		48,429		940,743		4,678			8,736,882		53,107

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, 2019					March 31, 2019					December 31, 2018					September 30, 2018					June 30, 2018
		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	$	2,857,425	29,300	4.10	%	$	2,842,556	29,282	4.12	%	$	2,837,220	28,794	4.06	%	$	2,804,027	28,974	4.13	%	$	2,761,528	27,893	4.04	%
	Home equity loans	1,319,056		17,717	5.39	%	1,265,974		16,048	5.14	%	1,264,169		15,788	4.95	%	1,272,847		15,248	4.75	%	1,281,001		15,384	4.82	%
	Consumer loans	943,254		10,649	4.53	%	869,536		10,052	4.69	%	791,685		9,365	4.69	%	704,203		8,337	4.70	%	655,541		7,949	4.86	%
	Consumer finance loans	1,826		87	19.06	%	2,999		139	18.54	%	4,751		220	18.52	%	7,176		343	19.12	%	10,428		516	19.79	%
	Commercial real estate loans	2,801,953		35,537	5.02	%	2,560,408		30,767	4.81	%	2,492,331		29,991	4.71	%	2,540,270		29,974	4.62	%	2,518,170		29,034	4.56	%
	Commercial loans	670,613		7,966	4.70	%	615,090		8,967	5.83	%	590,195		8,666	5.75	%	598,842		8,203	5.36	%	624,087		7,703	4.88	%
	Total loans receivable (a) (b) (d)	8,594,127		101,256	4.73	%	8,156,563		95,255	4.74	%	7,980,351		92,824	4.61	%	7,927,365		91,079	4.56	%	7,850,755		88,479	4.52	%
	Mortgage-backed securities (c)	644,887		4,280	2.65	%	604,463		3,965	2.62	%	619,105		3,942	2.55	%	598,596		3,572	2.39	%	569,893		3,255	2.28	%
	Investment securities (c) (d)	226,325		1,198	2.12	%	227,312		1,167	2.05	%	227,813		1,140	2.00	%	244,346		1,074	1.76	%	235,784		1,044	1.77	%
	FHLB stock, at cost	16,117		316	7.86	%	16,098		171	4.31	%	14,372		151	4.17	%	9,819		119	4.81	%	7,819		85	4.36	%
	Other interest-earning deposits	20,983		159	3.00	%	14,136		100	2.83	%	10,454		68	2.55	%	26,057		162	2.43	%	103,739		469	1.79	%
	Total interest-earning assets	9,502,439		107,209	4.53	%	9,018,572		100,658	4.53	%	8,852,095		98,125	4.40	%	8,806,183		96,006	4.33	%	8,767,990		93,332	4.27	%
	Noninterest earning assets (e)	910,225					868,843					743,262					746,077					732,065
	Total assets	$	10,412,664				$	9,887,415				$	9,595,357				$	9,552,260				$	9,500,055

	Liabilities and shareholders' equity:
	Interest-bearing liabilities:
	Savings deposits	$	1,696,715	777	0.18	%	$	1,650,947	758	0.19	%	$	1,637,400	758	0.18	%	$	1,672,990	785	0.19	%	$	1,699,168	773	0.18	%
	Interest-bearing demand deposits	1,674,779		1,569	0.38	%	1,452,963		1,162	0.32	%	1,442,587		1,066	0.29	%	1,460,556		1,064	0.29	%	1,468,228		875	0.24	%
	Money market deposit accounts	1,776,558		3,433	0.78	%	1,693,626		2,579	0.62	%	1,678,664		1,910	0.45	%	1,685,368		1,565	0.37	%	1,691,652		1,211	0.29	%
	Time deposits	1,561,034		6,705	1.72	%	1,432,679		5,646	1.60	%	1,401,352		5,251	1.49	%	1,403,967		4,819	1.36	%	1,440,457		4,450	1.24	%
	Borrowed funds (f)	147,119		413	1.13	%	257,550		1,006	1.58	%	216,975		782	1.43	%	129,523		239	0.73	%	104,415		50	0.19	%
	Junior subordinated debentures	121,757		1,307	4.25	%	114,727		1,156	4.03	%	111,213		1,170	4.12	%	111,213		1,316	4.63	%	111,213		1,290	4.59	%
	Total interest-bearing liabilities	6,977,962		14,204	0.82	%	6,602,492		12,307	0.76	%	6,488,191		10,937	0.67	%	6,463,617		9,788	0.60	%	6,515,133		8,649	0.53	%
	Noninterest-bearing demand deposits (g)	1,888,697					1,785,158					1,750,253					1,724,427					1,676,344
	Noninterest bearing liabilities	225,623					223,480					112,349					132,062					92,252
	Total liabilities	9,092,282					8,611,130					8,350,793					8,320,106					8,283,729
	Shareholders' equity	1,320,382					1,276,285					1,244,564					1,232,154					1,216,326
	Total liabilities and shareholders' equity	$	10,412,664				$	9,887,415				$	9,595,357				$	9,552,260				$	9,500,055
	Net interest income/Interest rate spread			93,005	3.71	%			88,351	3.77	%			87,188	3.73	%			86,218	3.73	%			84,683	3.74	%
	Net interest-earning assets/Net interest margin	$	2,524,477		3.91	%	$	2,416,080		3.97	%	$	2,363,904		3.94	%	$	2,342,566		3.92	%	$	2,252,857		3.86	%
	Ratio of interest-earning assets to interest-bearing liabilities	1.36X					1.37X					1.36X					1.36X					1.35X

(a)	Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b)	Interest income includes accretion/amortization of deferred loan fees/expenses, which was not material.
(c)	Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d)	Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent ("FTE") basis.
(e)	Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f)	Average balances include FHLB borrowings and collateralized borrowings.
(g)	Average cost of deposits were 0.58%, 0.51%, 0.45%, 0.41% and 0.37%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.71%, 4.72%, 4.60%, 4.54% and 4.50%, respectively, Investment securities - 2.01%, 1.97%, 1.92%, 1.67% and 1.63%, respectively, Interest-earning assets - 4.51%, 4.51%, 4.38%, 4.31% and 4.25%, respectively. GAAP basis net interest rate spreads were 3.69%, 3.75%, 3.71%, 3.71% and 3.72%, respectively, and GAAP basis net interest margins were 3.90%, 3.96%, 3.92%, 3.90% and 3.84%, respectively.

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.

		Six months ended June 30,
		2019					2018
		Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)
	Assets:
	Interest-earning assets:
	Residential mortgage loans	$	2,850,031	58,582	4.11	%	$	2,758,849	55,612	4.03	%
	Home equity loans	1,292,662		33,765	5.27	%	1,289,842		30,369	4.75	%
	Consumer loans	906,598		20,701	4.60	%	646,666		15,451	4.82	%
	Consumer finance loans	2,409		226	18.76	%	12,828		1,284	20.02	%
	Commercial real estate loans	2,681,848		66,303	4.92	%	2,494,925		56,214	4.48	%
	Commercial loans	643,005		16,933	5.24	%	609,752		15,070	4.92	%
	Loans receivable (a) (b) (d)	8,376,553		196,510	4.73	%	7,812,862		174,000	4.49	%
	Mortgage-backed securities (c)	624,786		8,245	2.64	%	564,007		6,268	2.22	%
	Investment securities (c) (d)	226,815		2,364	2.08	%	245,979		2,216	1.80	%
	FHLB stock	16,096		487	6.10	%	8,582		182	4.28	%
	Other interest-earning deposits	16,381		259	3.14	%	68,970		604	1.74	%
	Total interest-earning assets	9,260,631		207,865	4.53	%	8,700,400		183,270	4.25	%
	Noninterest earning assets (e)	889,409					755,764
	Total assets	$	10,150,040				$	9,456,164

	Liabilities and shareholders' equity:
	Interest-bearing liabilities:
	Savings deposits	$	1,673,957	1,535	0.18	%	$	1,684,909	1,522	0.18	%
	Interest-bearing demand deposits	1,588,989		2,732	0.35	%	1,443,981		1,477	0.21	%
	Money market deposit accounts	1,735,185		6,011	0.70	%	1,699,222		2,264	0.27	%
	Time deposits	1,497,208		12,351	1.66	%	1,427,921		8,504	1.20	%
	Borrowed funds (f)	202,029		1,419	1.42	%	118,743		173	0.29	%
	Junior subordinated debentures	118,242		2,463	4.14	%	111,213		2,475	4.43	%
	Total interest-bearing liabilities	6,815,610		26,511	0.78	%	6,485,989		16,415	0.51	%
	Noninterest-bearing demand deposits (g)	1,699,496					1,641,493
	Noninterest bearing liabilities	336,600					117,530
	Total liabilities	8,851,706					8,245,012
	Shareholders' equity	1,298,334					1,211,152
	Total liabilities and shareholders' equity	$	10,150,040				$	9,456,164
	Net interest income/Interest rate spread			181,354	3.75	%			166,855	3.74	%
	Net interest-earning assets/Net interest margin	$	2,445,021		3.92	%	$	2,214,411		3.84	%
	Ratio of interest-earning assets to interest-bearing liabilities	1.36X					1.34X

(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 basis.
(e)	Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f)	Average balances include FHLB borrowings and collateralized borrowings.
(g)	Average cost of deposits were 0.56% and 0.35%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.71% and 4.47%, respectively, Investment securities - 1.99% and 1.65%, respectively, Interest-earning assets - 4.51% and 4.23%, respectively. GAAP basis net interest rate spreads were 3.73% and 3.72%, respectively, and GAAP basis net interest margins were 3.90% and 3.82%, respectively.