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

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Jul 26, 2021, 09:00 ET

WARREN, Pa., July 26, 2021 /PRNewswire/ -- Northwest Bancshares, Inc. (the "Company") (NasdaqGS: NWBI) announced net income for the quarter ended June 30, 2021 of $49.0 million, or $0.38 per diluted share. This represents an increase of $55.2 million compared to the same quarter last year, when the Company experienced a net loss of $6.2 million, or ($0.05) per diluted share, due primarily to COVID-19 related credit loss provisioning. The annualized returns on average shareholders' equity and average assets for the quarter ended June 30, 2021 were 12.58% and 1.37% compared to (1.63%) and (0.18%) for the same quarter last year. The Company's current period earnings were enhanced by a $25.3 million pre-tax gain from the previously disclosed sale of its insurance business to USI Insurance Services on April 30, 2021.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share payable on August 16, 2021 to shareholders of record as of August 5, 2021. This is the 107^thconsecutive 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, 2021, this represents an annualized dividend yield of approximately 5.9%.

In making this announcement, Ronald J. Seiffert, Chairman, President and CEO, noted, "We continue to experience the negative effects of the current low interest rate environment on our net interest income along with excess liquidity, both at the bank level and from a customer perspective, causing low, and falling, net interest margins. Our net interest margin decreased 27 basis points from the first quarter of 2021 to 2.91% due mostly to lower loan yields which accounted for approximately 15 basis points of this decline. In addition, purchase accounting and PPP accretion was $3.5 million lower this quarter than the first quarter 2021, contributing another 11 basis points to this decline. Furthermore, slower loan demand which, along with PPP forgiveness, is muting loan growth. Fortunately, this excess liquidity, assisted through government stimulus, has kept loan delinquency and actual loan losses in check, enabling us to recoup the excess COVID-19 reserves of 2020 and right size our allowance for credit losses."

Mr. Seiffert continued, "We also continue to invest in our people, infrastructure and technology as we believe this short-term expense is essential to remain competitive as we ultimately look to scale in size in order to recognize long-term efficiencies. Our customers demand ease, speed, convenience and security and we want to ensure that our existing and new customers experience the innovation and technology they expect and deserve."

Net interest income decreased by $2.3 million, or 2.4%, to $95.7 million for the quarter ended June 30, 2021, from $98.1 million for the quarter ended June 30, 2020, largely due to a $7.8 million, or 7.5%, decrease in interest income on loans receivable. This decrease in interest income on loans was mainly due to a decrease in the average loan yield to 3.73% for the quarter ended June 30, 2021 from 4.09% for the quarter ended June 30, 2020. Also contributing to the decrease in interest income on loans was a decrease of $96.8 million, or 0.9%, in the average balance of loans. Partially offsetting this decrease was a decrease of $4.6 million, or 48.9%, 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 0.29% for the quarter ended June 30, 2021 from 0.48% for the quarter ended June 30, 2020. The net effect of the changes in interest rates and average balances was a decrease in net interest margin to 2.91% for the quarter ended June 30, 2021 from 3.38% for the same quarter last year.

Our credit loss reserve process and modeling concluded that no provision for credit losses was necessary this quarter, which represents a decrease of $51.8 million compared to the quarter ended June 30, 2020. This decrease was primarily due to continued improvements in economic forecasts compared to the uncertainty that existed last year in industries impacted by COVID-19.

Noninterest expense decreased by $2.8 million, or 3.2%, to $86.3 million for the quarter ended June 30, 2021, from $89.2 million for the quarter ended June 30, 2020. This decrease was primarily due to a decline of $9.0 million, or 93.5%, in merger related expenses due to expenses incurred in the prior year as a result of the acquisition of MutualFirst Financial, Inc. Also contributing to this decrease was a reduction of $6.4 million, or 81.9%, in other expenses primarily due to an elevated reserve for unfunded commitments during the second quarter of 2020 resulting from the estimated economic impact of COVID-19. Partially offsetting these decreases was an increase of $8.8 million, or 22.1%, in compensation and employee benefits due primarily to increases in health insurance and other benefit costs, regular merit expense and the addition of MutualBank employees and other strategic personnel. Also contributing to this increase was an increase of $3.5 million, or 29.7%, in processing expenses as we continue to invest in technology and infrastructure and as activity-driven utilization fees for ATM, check card, and online and mobile banking has increased. Lastly, there was an increase of $1.4 million, or 49.8%, in professional service expense for the quarter ended June 30, 2021 due primarily to the utilization of third-party experts to assist with our digital strategy rollout.

The provision for income taxes increased by $16.3 million to an expense of $15.1 million for the quarter ended June 30, 2021, from a tax benefit of $1.1 million for the quarter ended June 30, 2020. This increase in income taxes was 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 June 30, 2021, Northwest operated 162 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania, New York, Ohio and Indiana. Northwest Bancshares, Inc.'s common stock is listed on the NASDAQ Global Select Market ("NWBI"). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com.

Forward-Looking Statements - This release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses or the ability to complete sales transactions; (7) increased risk associated with commercial real-estate and business loans; and (8) the effect of any pandemic, including COVID-19, war or act of terrorism. Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.

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

	June 30, 2021			December 31, 2020		June 30, 2020
Assets
Cash and cash equivalents	$	857,152		736,277		837,227
Marketable securities available-for-sale (amortized cost of $1,593,813, $1,375,685 and $1,176,258, respectively)	1,599,024			1,398,941		1,198,792
Marketable securities held-to-maturity (fair value of $632,620, $179,666 and $17,245, respectively)	639,424			178,887		16,415
Total cash and cash equivalents and marketable securities	3,095,600			2,314,105		2,052,434

Residential mortgage loans held-for-sale	29,055			58,786		34,118
Residential mortgage loans	2,925,496			3,009,335		3,188,637
Home equity loans	1,376,228			1,467,736		1,450,370
Consumer loans	1,745,231			1,507,993		1,518,119
Commercial real estate loans	3,215,189			3,345,889		3,308,824
Commercial loans	1,018,781			1,191,110		1,358,719
Total loans receivable	10,309,980			10,580,849		10,858,787
Allowance for credit losses	(117,330)			(134,427)		(140,586)
Loans receivable, net	10,192,650			10,446,422		10,718,201

FHLB stock, at cost	23,287			21,748		25,542
Accrued interest receivable	27,585			35,554		40,510
Real estate owned, net	1,353			2,232		1,897
Premises and equipment, net	156,076			161,538		166,966
Bank-owned life insurance	253,539			253,951		251,897
Goodwill	380,997			382,279		386,044
Other intangible assets, net	15,362			19,936		23,381
Other assets	151,607			168,503		178,212
Total assets	$	14,298,056		13,806,268		13,845,084
Liabilities and shareholders' equity
Liabilities
Noninterest-bearing demand deposits	$	3,002,632		2,716,224		2,686,487
Interest-bearing demand deposits	2,824,219			2,755,950		2,632,310
Money market deposit accounts	2,538,607			2,437,539		2,327,286
Savings deposits	2,262,152			2,047,424		1,993,761
Time deposits	1,463,098			1,642,096		1,823,097
Total deposits	12,090,708			11,599,233		11,462,941

Borrowed funds	257,377			283,044		440,079
Junior subordinated debentures	128,924			128,794		128,630
Advances by borrowers for taxes and insurance	53,608			45,230		58,559
Accrued interest payable	1,820			2,054		1,389
Other liabilities	190,258			209,210		222,637
Total liabilities	12,722,695			12,267,565		12,314,235
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, 127,907,885, 127,019,452, and 127,838,400 shares issued and outstanding, respectively	1,279			1,270		1,278
Additional paid-in capital	1,025,174			1,015,502		1,023,083
Retained earnings	595,100			555,480		530,928
Accumulated other comprehensive loss	(46,192)			(33,549)		(24,440)
Total shareholders' equity	1,575,361			1,538,703		1,530,849
Total liabilities and shareholders' equity	$	14,298,056		13,806,268		13,845,084

Equity to assets	11.02		%	11.14	%	11.06	%
Tangible common equity to assets*	8.48		%	8.48	%	8.35	%
Book value per share	$	12.32		12.11		11.97
Tangible book value per share*	$	9.22		8.95		8.77
Closing market price per share	$	13.64		12.74		10.23
Full time equivalent employees	2,393			2,421		2,518
Number of banking offices	170			170		213

* 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
	June 30, 2021			March 31, 2021		December 31, 2020		September 30, 2020		June 30, 2020
	June 30, 2021			March 31, 2021		December 31, 2020		September 30, 2020		June 30, 2020
Interest income:
Loans receivable	$	95,255		102,318		105,681		107,241		103,012
Mortgage-backed securities	5,680			4,200		4,551		4,652		4,038
Taxable investment securities	693			634		471		427		439
Tax-free investment securities	594			575		656		655		564
FHLB stock dividends	138			116		192		218		309
Interest-earning deposits	192			183		178		221		185
Total interest income	102,552			108,026		111,729		113,414		108,547
Interest expense:
Deposits	4,773			5,514		6,714		8,443		9,336
Borrowed funds	2,050			2,054		2,127		1,437		1,133
Total interest expense	6,823			7,568		8,841		9,880		10,469
Net interest income	95,729			100,458		102,888		103,534		98,078
Provision for credit losses	—			(5,620)		(2,230)		6,818		51,750
Net interest income after provision for credit losses	95,729			106,078		105,118		96,716		46,328
Noninterest income:
Gain/(loss) on sale of investments	(105)			(21)		75		(12)		(8)
Service charges and fees	12,744			12,394		13,074		14,354		13,069
Trust and other financial services income	7,435			6,484		5,722		5,376		4,823
Insurance commission income	1,043			2,546		2,034		2,331		2,395
Gain/(loss) on real estate owned, net	166			(42)		114		(32)		(97)
Income from bank-owned life insurance	1,639			1,736		1,330		1,576		1,248
Mortgage banking income	3,811			6,020		7,120		11,055		12,022
Gain on sale of insurance business	25,327			—		—		—		—
Other operating income	2,648			2,836		2,654		2,022		2,044
Total noninterest income	54,708			31,953		32,123		36,670		35,496
Noninterest expense:
Compensation and employee benefits	48,894			47,239		48,209		47,371		40,049
Premises and occupancy costs	7,410			8,814		7,614		8,342		7,195
Office operations	3,317			3,165		4,009		4,626		3,711
Collections expense	303			616		893		1,264		644
Processing expenses	15,151			13,456		12,186		15,042		11,680
Marketing expenses	2,101			1,980		1,994		2,147		2,047
Federal deposit insurance premiums	1,353			1,307		1,651		1,498		1,618
Professional services	4,231			4,582		3,599		3,246		2,825
Amortization of intangible assets	1,433			1,594		1,664		1,781		1,760
Real estate owned expense	85			75		64		111		89
Merger, asset disposition and restructuring expense	632			9		7,238		1,414		9,679
Other expenses	1,422			3,354		3,728		27		7,866
Total noninterest expense	86,332			86,191		92,849		86,869		89,163
Income/(loss) before income taxes	64,105			51,840		44,392		46,517		(7,339)
Income tax expense/(benefit)	15,138			11,603		9,327		8,467		(1,139)
Net income/(loss)	$	48,967		40,237		35,065		38,050		(6,200)

Basic earnings/(loss) per share	$	0.38		0.32		0.28		0.30		(0.05)
Diluted earnings/(loss) per share	$	0.38		0.32		0.28		0.30		(0.05)

Annualized return on average equity	12.58		%	10.61	%	9.00	%	9.82	%	(1.63)	%
Annualized return on average assets	1.37		%	1.17	%	1.01	%	1.09	%	(0.18)	%
Annualized return on tangible common equity *	16.66		%	14.31	%	12.27	%	13.28	%	(2.22)	%

Efficiency ratio **	67.35		%	63.88	%	62.18	%	59.68	%	58.19	%
Annualized noninterest expense to average assets ***	2.35		%	2.45	%	2.42	%	2.39	%	2.30	%


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

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

	Six months ended June 30,
	2021			2020
Interest income:
Loans receivable	$	197,573		197,985
Mortgage-backed securities	9,880			8,213
Taxable investment securities	1,327			1,087
Tax-free investment securities	1,169			749
FHLB stock dividends	254			571
Interest-earning deposits	375			320
Total interest income	210,578			208,925
Interest expense:
Deposits	10,287			20,739
Borrowed funds	4,104			2,880
Total interest expense	14,391			23,619
Net interest income	196,187			185,306
Provision for credit losses	(5,620)			79,387
Net interest income after provision for credit losses	201,807			105,919
Noninterest income:
Gain/(loss) on sale of investments	(126)			173
Gain on sale of loans	—			1,302
Service charges and fees	25,138			28,185
Trust and other financial services income	13,919			9,824
Insurance commission income	3,589			4,767
Gain/(loss) on real estate owned, net	124			(188)
Income from bank-owned life insurance	3,375			2,284
Mortgage banking income	9,831			13,216
Gain on sale of insurance business	25,327			—
Other operating income	5,484			3,909
Total noninterest income	86,661			63,472
Noninterest expense:
Compensation and employee benefits	96,133			82,795
Premises and occupancy costs	16,224			14,666
Office operations	6,482			7,093
Collections expense	919			1,118
Processing expenses	28,607			22,822
Marketing expenses	4,081			3,554
Federal deposit insurance premiums	2,660			1,618
Professional services	8,813			5,637
Amortization of intangible assets	3,027			3,411
Real estate owned expense	160			184
Merger, asset disposition and restructuring expense	641			12,137
Other expenses	4,776			12,739
Total noninterest expense	172,523			167,774
Income before income taxes	115,945			1,617
Income tax expense/(benefit)	26,741			(122)
Net income	$	89,204		1,739

Basic earnings per share	$	0.70		0.02
Diluted earnings per share	$	0.70		0.02

Annualized return on average equity	11.61		%	0.24	%
Annualized return on average assets	1.27		%	0.03	%
Annualized return on tangible common equity *	15.26		%	0.31	%

Efficiency ratio **	65.57		%	61.19	%
Annualized noninterest expense to average assets ***	2.40		%	2.53	%


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

Northwest Bancshares, Inc. and Subsidiaries Reconciliation of Non-GAAP to GAAP Net Income (Unaudited) * (dollars in thousands, except per share amounts)

	Quarter ended June 30,					Six months ended June 30,
	2021			2020		2021		2020
Operating results (non-GAAP):
Net interest income	$	95,729		98,078		196,187		185,306
Provision for credit losses	—			12,279		(5,620)		16,203
Noninterest income	29,381			35,496		61,334		63,472
Noninterest expense	85,700			83,368		171,882		157,637
Income taxes	8,224			11,535		19,829		20,408
Net operating income (non-GAAP)	$	31,186		26,392		71,430		54,530
Diluted earnings per share (non-GAAP)	$	0.24		0.22		0.56		0.48

Average equity	$	1,560,959		1,528,868		1,549,755		1,439,489
Average assets	14,356,759			13,590,131		14,173,278		12,093,801
Annualized return on average equity (non-GAAP)	8.01		%	6.94	%	9.29	%	7.62	%
Annualized return on average assets (non-GAAP)	0.87		%	0.78	%	1.02	%	0.91	%

Reconciliation of net operating income to net income:
Net operating income (non-GAAP)	$	31,186		26,392		71,430		54,530
Non-GAAP adjustments, net of tax:
COVID-related provision **	—			(15,330)		—		(32,404)
CECL provision impact due to acquisition of MutualBank	—			(13,089)		—		(13,089)
Gain on sale of insurance business	18,236			—		18,236		—
PPP deferred origination costs	—			3,034		—		3,034
COVID-related off balance sheet provision **	—			(238)		—		(1,594)
Merger/asset disposition expense	(455)			(6,969)		(462)		(8,739)
Net income (GAAP)	$	48,967		(6,200)		89,204		1,738
Diluted earnings per share (GAAP)	$	0.38		(0.05)		0.70		0.02

Annualized return on average equity (GAAP)	12.58		%	(1.63)	%	11.61	%	0.24	%
Annualized return on average assets (GAAP)	1.37		%	(0.18)	%	1.27	%	0.03	%


*	The table summarizes the Company's results from operations on a GAAP basis and on an operating (non-GAAP) basis for the periods indicated. Operating results exclude the gain on the sale of our insurance business, merger/asset disposition expense and prior period estimated COVID-related provision, CECL provision related to the acquisition of MutualBank, PPP deferred origination costs and estimated COVID-related off balance sheet provision. The net tax effect was calculated using statutory tax rates of approximately 28.0%. The Company believes this non-GAAP presentation provides a meaningful comparison of operational performance and facilitates a more effective evaluation and comparison of results to assess performance in relation to ongoing operations.
**	To arrive at the non-COVID related provision estimates, the Company applied Moody's forecast scenarios prior to the onset of COVID-19 to the Company's loan portfolio for the periods presented.

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

	June 30, 2021			March 31, 2021		December 31, 2020		September 30, 2020		June 30, 2020
Nonaccrual loans current:
Residential mortgage loans	$	189		164		21		1,128		413
Home equity loans	170			268		154		366		481
Consumer loans	188			225		207		234		214
Commercial real estate loans	138,820			146,304		20,317		22,610		30,677
Commercial loans	17,545			6,361		16,027		6,488		6,551
Total nonaccrual loans current	$	156,912		153,322		36,726		30,826		38,336
Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans	$	68		1,261		647		60		61
Home equity loans	229			340		338		445		247
Consumer loans	230			254		301		230		335
Commercial real estate loans	1,589			965		1,416		692		2,372
Commercial loans	406			1,538		87		57		—
Total nonaccrual loans delinquent 30 days to 59 days	$	2,522		4,358		2,789		1,484		3,015
Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans	$	207		813		767		576		1,013
Home equity loans	310			417		190		618		960
Consumer loans	297			649		583		781		666
Commercial real estate loans	198			1,877		714		2,745		163
Commercial loans	21			7,919		48		15		768
Total nonaccrual loans delinquent 60 days to 89 days	$	1,033		11,675		2,302		4,735		3,570
Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans	$	10,007		9,333		14,489		14,750		15,369
Home equity loans	6,256			7,044		8,441		7,845		7,060
Consumer loans	2,341			3,625		5,473		5,352		6,896
Commercial real estate loans	23,564			29,737		25,287		35,496		29,729
Commercial loans	4,126			4,860		7,325		6,310		11,535
Total nonaccrual loans delinquent 90 days or more	$	46,294		54,599		61,015		69,753		70,589
Total nonaccrual loans	$	206,761		223,954		102,832		106,798		115,510
Total nonaccrual loans	$	206,761		223,954		102,832		106,798		115,510
Loans 90 days past due and still accruing	302			197		585		495		77
Nonperforming loans	207,063			224,151		103,417		107,293		115,587
Real estate owned, net	1,353			1,738		2,232		2,575		1,897
Nonperforming assets	$	208,416		225,889		105,649		109,868		117,484
Nonaccrual troubled debt restructuring *	$	8,951		7,390		10,704		17,120		17,562
Accruing troubled debt restructuring	18,480			20,120		21,431		17,684		17,888
Total troubled debt restructuring	$	27,431		27,510		32,135		34,804		35,450

Nonperforming loans to total loans	2.01		%	2.16	%	0.98	%	1.00	%	1.06	%
Nonperforming assets to total assets	1.46		%	1.58	%	0.77	%	0.80	%	0.85	%
Allowance for credit losses to total loans	1.14		%	1.20	%	1.27	%	1.30	%	1.29	%
Allowance for total loans excluding PPP loan balances	1.17		%	1.24	%	1.32	%	1.36	%	1.36	%
Allowance for credit losses to nonperforming loans	56.66		%	55.32	%	129.99	%	130.68	%	121.63	%

* Amounts included in nonperforming loans above.

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

At June 30, 2021	Pass		Special mention *	Substandard **	Doubtful *******	Loss	Loans receivable
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
At March 31, 2021
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


*	Includes $16.7 million, $26.4 million, $31.3 million, $34.7 million, and $37.4 million of acquired loans at June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020, and June 30, 2020, respectively.
**	Includes $122.5 million, $143.2 million, $153.2 million, $129.2 million, and $108.2 million of acquired loans at June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020, and June 30, 2020, respectively.
***	Includes $1.1 million of acquired loans at June 30, 2020.

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

	June 30, 2021			*		March 31, 2021			*		December 31, 2020			*		September 30, 2020			*		June 30, 2020			*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans	13	$	606	—	%	248	$	22,236	0.7	%	315	$	28,797	0.9	%	17	$	736	—	%	15	$	629	—	%
Home equity loans	91	3,677		0.3	%	84	3,334		0.2	%	138	4,763		0.3	%	129	4,984		0.3	%	118	4,569		0.3	%
Consumer loans	532	5,571		0.3	%	535	5,732		0.4	%	1,279	10,574		0.7	%	1,078	8,586		0.6	%	629	7,199		0.5	%
Commercial real estate loans	13	2,857		0.1	%	33	12,240		0.4	%	43	10,923		0.3	%	28	5,090		0.2	%	46	14,177		0.4	%
Commercial loans	15	686		0.1	%	16	3,032		0.3	%	37	6,405		0.5	%	19	1,797		0.1	%	12	1,242		0.1	%
Total loans delinquent 30 days to 59 days	664	$	13,397	0.1	%	916	$	46,574	0.4	%	1,812	$	61,462	0.6	%	1,271	$	21,193	0.2	%	820	$	27,816	0.3	%

Loans delinquent 60 days to 89 days:
Residential mortgage loans	58	$	4,051	0.1	%	26	$	2,062	0.1	%	84	$	5,083	0.2	%	65	$	4,788	0.2	%	64	$	5,364	0.2	%
Home equity loans	36	1,502		0.1	%	31	953		0.1	%	47	1,656		0.1	%	56	1,860		0.1	%	59	2,326		0.2	%
Consumer loans	181	1,988		0.1	%	169	1,868		0.1	%	322	2,742		0.2	%	323	3,049		0.2	%	258	2,916		0.2	%
Commercial real estate loans	9	1,335		—	%	14	7,609		0.2	%	11	1,615		—	%	14	4,212		0.1	%	18	3,913		0.1	%
Commercial loans	2	27		—	%	12	8,979		0.8	%	10	864		0.1	%	7	357		—	%	15	1,151		0.1	%
Total loans delinquent 60 days to 89 days	286	$	8,903	0.1	%	252	$	21,471	0.2	%	474	$	11,960	0.1	%	465	$	14,266	0.1	%	414	$	15,670	0.1	%

Loans delinquent 90 days or more: **
Residential mortgage loans	115	$	10,007	0.3	%	121	$	9,333	0.3	%	168	$	14,489	0.5	%	168	$	14,750	0.5	%	185	$	15,369	0.5	%
Home equity loans	146	6,256		0.5	%	176	7,044		0.5	%	207	8,441		0.6	%	193	7,845		0.5	%	182	7,060		0.5	%
Consumer loans	356	2,643		0.2	%	454	3,822		0.2	%	720	6,058		0.4	%	696	5,847		0.4	%	709	6,896		0.5	%
Commercial real estate loans	83	23,564		0.7	%	113	29,737		0.9	%	119	25,287		0.8	%	136	35,496		1.1	%	149	29,729		0.9	%
Commercial loans	18	4,126		0.4	%	31	4,860		0.4	%	37	7,325		0.6	%	34	6,310		0.5	%	47	11,535		0.8	%
Total loans delinquent 90 days or more	718	$	46,596	0.5	%	895	$	54,796	0.5	%	1,251	$	61,600	0.6	%	1,227	$	70,248	0.7	%	1,272	$	70,589	0.7	%

Total loans delinquent	1,668	$	68,896	0.7	%	2,063	$	122,841	1.2	%	3,537	$	135,022	1.3	%	2,963	$	105,707	1.0	%	2,506	$	114,075	1.1	%


*	Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
**	Includes purchased credit deteriorated loans of $10.3 million, $12.7 million, $6.6 million, $20.3 million, and $18.0 million at June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020, and June 30, 2020, respectively.

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

			Quarter ended
			June 30, 2021			March 31, 2021		December 31, 2020			September 30, 2020		June 30, 2020
Beginning balance			$	123,997		134,427		140,209			140,586		92,897
CECL adoption			—			—		—			—		—
Initial allowance on loans purchased with credit deterioration			—			—		—			—		8,845
Provision			—			(5,620)		(2,230)			6,818		51,750
Charge-offs residential mortgage			(770)			(855)		(407)			(129)		(38)
Charge-offs home equity			(379)			(228)		(58)			(88)		(173)
Charge-offs consumer			(2,401)			(2,603)		(2,623)			(3,356)		(3,191)
Charge-offs commercial real estate			(3,964)			(4,626)		(2,770)			(532)		(690)
Charge-offs commercial			(1,161)			(54)		(156)			(4,892)		(10,349)
Recoveries			2,008			3,556		2,462			1,802		1,535
Ending balance			$	117,330		123,997		134,427			140,209		140,586
Net charge-offs to average loans, annualized			0.26		%	0.19	%	0.13	%		0.27	%	0.51	%

										Six months ended June 30,
										2021			2020
Beginning balance										$	134,427		57,941
CECL adoption										—			10,792
Initial allowance on loans purchased with credit deterioration										—			8,845
Provision										(5,620)			79,387
Charge-offs residential mortgage										(1,625)			(381)
Charge-offs home equity										(607)			(462)
Charge-offs consumer										(5,004)			(6,679)
Charge-offs commercial real estate										(8,590)			(1,021)
Charge-offs commercial										(1,215)			(11,164)
Recoveries										5,564			3,328
Ending balance										$	117,330		140,586
Net charge-offs to average loans, annualized										0.22		%	0.35	%

	June 30, 2021
	Originated loans					Acquired loans					Total loans
	Balance			Reserve		Balance		Reserve			Balance		Reserve
Residential mortgage loans	$	2,701,046		6,316		253,505		931			2,954,551		7,247
Home equity loans	1,127,884			5,264		248,344		1,975			1,376,228		7,239
Consumer loans	1,565,344			13,667		179,887		2,022			1,745,231		15,689
Personal Banking Loans	5,394,274			25,247		681,736		4,928			6,076,010		30,175
Commercial real estate loans	2,585,259			54,473		629,930		14,837			3,215,189		69,310
Commercial loans	899,035			10,655		119,746		7,190			1,018,781		17,845
Commercial Banking Loans	3,484,294			65,128		749,676		22,027			4,233,970		87,155
Total Loans	$	8,878,568		90,375		1,431,412		26,955			10,309,980		117,330

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, 2021					March 31, 2021					December 31, 2020					September 30, 2020					June 30, 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	$	2,935,034	25,609	3.49	%	$	3,007,439	26,366	3.51	%	$	3,089,916	27,503	3.56	%	$	3,176,436	28,769	3.62	%	$	3,092,392	29,019	3.75	%
Home equity loans	1,380,794		12,232	3.55	%	1,432,009		12,815	3.63	%	1,472,527		13,535	3.66	%	1,479,429		13,732	3.69	%	1,415,091		13,806	3.92	%
Consumer loans	1,589,739		14,555	3.67	%	1,463,284		14,566	4.04	%	1,444,860		15,874	4.37	%	1,437,828		15,851	4.39	%	1,375,130		14,993	4.39	%
Commercial real estate loans	3,257,810		33,349	4.05	%	3,313,892		38,471	4.64	%	3,317,418		37,965	4.48	%	3,306,386		36,887	4.37	%	3,156,749		34,595	4.34	%
Commercial loans	1,133,969		9,978	3.48	%	1,189,812		10,566	3.55	%	1,325,047		11,414	3.37	%	1,377,223		12,603	3.58	%	1,161,228		11,269	3.84	%
Total loans receivable (a) (b) (d)	10,297,346		95,723	3.73	%	10,406,436		102,784	4.01	%	10,649,768		106,291	3.97	%	10,777,302		107,842	3.98	%	10,200,590		103,682	4.09	%
Mortgage-backed securities (c)	1,756,227		5,680	1.29	%	1,324,558		4,200	1.27	%	1,166,739		4,551	1.56	%	1,004,803		4,651	1.85	%	714,657		4,038	2.26	%
Investment securities (c) (d)	364,414		1,466	1.61	%	331,358		1,381	1.67	%	252,898		1,380	2.18	%	216,081		1,336	2.47	%	170,309		1,244	2.92	%
FHLB stock, at cost	23,107		138	2.40	%	21,811		116	2.17	%	23,346		192	3.27	%	25,595		218	3.39	%	22,192		309	5.60	%
Other interest-earning deposits	810,741		192	0.09	%	801,119		183	0.09	%	632,494		178	0.11	%	791,601		221	0.11	%	623,870		185	0.12	%
Total interest-earning assets	13,251,835		103,199	3.12	%	12,885,282		108,664	3.42	%	12,725,245		112,592	3.52	%	12,815,382		114,268	3.55	%	11,731,618		109,458	3.75	%
Noninterest-earning assets (e)	1,104,924					1,102,477					1,066,609					1,088,273					1,858,513
Total assets	$	14,356,759				$	13,987,759				$	13,791,854				$	13,903,655				$	13,590,131
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings deposits	$	2,255,578	590	0.10	%	$	2,118,030	625	0.12	%	$	2,028,155	617	0.12	%	$	2,015,604	648	0.13	%	$	1,884,202	648	0.14	%
Interest-bearing demand deposits	2,840,949		407	0.06	%	2,783,429		429	0.06	%	2,699,515		476	0.07	%	2,680,591		763	0.11	%	2,428,060		812	0.13	%
Money market deposit accounts	2,537,629		621	0.10	%	2,497,495		657	0.11	%	2,426,513		960	0.16	%	2,347,097		1,347	0.23	%	2,204,810		1,600	0.29	%
Time deposits	1,493,947		3,155	0.85	%	1,583,525		3,803	0.97	%	1,676,094		4,660	1.11	%	1,782,350		5,685	1.27	%	1,761,260		6,276	1.43	%
Borrowed funds (f)	254,683		1,414	2.23	%	267,163		1,412	2.14	%	352,392		1,469	1.66	%	420,715		717	0.68	%	371,700		296	0.32	%
Junior subordinated debentures	128,882		636	1.95	%	128,817		642	1.99	%	128,752		659	2.00	%	128,658		720	2.19	%	127,472		837	2.60	%
Total interest-bearing liabilities	9,511,668		6,823	0.29	%	9,378,459		7,568	0.33	%	9,311,421		8,841	0.38	%	9,375,015		9,880	0.42	%	8,777,504		10,469	0.48	%
Noninterest-bearing demand deposits (g)	3,036,202					2,805,206					2,675,986					2,703,266					2,401,368
Noninterest-bearing liabilities	247,930					265,667					253,966					284,440					882,391
Total liabilities	12,795,800					12,449,332					12,241,373					12,362,721					12,061,263
Shareholders' equity	1,560,959					1,538,427					1,550,481					1,540,934					1,528,868
Total liabilities and shareholders' equity	$	14,356,759				$	13,987,759				$	13,791,854				$	13,903,655				$	13,590,131
Net interest income/Interest rate spread			96,376	2.84	%			101,096	3.09	%			103,751	3.14	%			104,388	3.13	%			98,989	3.27	%
Net interest-earning assets/Net interest margin	$	3,740,167		2.91	%	$	3,506,823		3.18	%	$	3,413,824		3.26	%	$	3,440,367		3.26	%	$	2,954,114		3.38	%
Ratio of interest-earning assets to interest-bearing liabilities	1.39X					1.37X					1.37X					1.37X					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 ("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 0.16%, 0.19%, 0.23%, 0.29%, and 0.35%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 3.71%, 3.99%, 3.94%, 3.96%, and 4.06%, respectively, Investment securities - 1.41%, 1.46%, 1.78%, 2.00%, and 2.36%, respectively, Interest-earning assets - 3.10%, 3.40%, 3.48%, 3.52%, and 3.72%, respectively. GAAP basis net interest rate spreads were 2.82%, 3.07%, 3.11%, 3.10%, and 3.24%, respectively, and GAAP basis net interest margins were 2.89%, 3.16%, 3.23%, 3.23%, and 3.34%, respectively.

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

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

	Six months ended June 30,
	2021					2020
	Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)
Assets
Interest-earning assets:
Residential mortgage loans	$	2,971,037	51,975	3.50	%	$	2,969,096	57,081	3.85	%
Home equity loans	1,406,260		25,046	3.57	%	1,380,076		28,607	4.17	%
Consumer loans	1,526,861		29,121	3.82	%	1,249,233		27,153	4.37	%
Commercial real estate loans	3,285,696		71,820	4.32	%	2,952,084		66,032	4.42	%
Commercial loans	1,161,736		20,543	3.50	%	936,924		20,124	4.25	%
Loans receivable (a) (b) (d)	10,351,590		198,505	3.85	%	9,487,413		198,997	4.22	%
Mortgage-backed securities (c)	1,541,585		9,880	1.28	%	691,564		8,213	2.38	%
Investment securities (c) (d)	347,977		2,847	1.64	%	157,231		2,125	2.70	%
FHLB stock, at cost	22,462		254	2.27	%	19,062		571	6.02	%
Other interest-earning deposits	805,930		375	0.09	%	329,284		320	0.19	%
Total interest-earning assets	13,069,544		211,861	3.25	%	10,684,554		210,226	3.96	%
Noninterest-earning assets (e)	1,103,734					1,409,247

Total assets	$	14,173,278				$	12,093,801

Liabilities and shareholders' equity
Interest-bearing liabilities:
Savings deposits	$	2,187,184	1,215	0.11	%	$	1,747,656	1,375	0.16	%
Interest-bearing demand deposits	2,812,348		836	0.06	%	2,171,970		2,119	0.20	%
Money market deposit accounts	2,517,673		1,278	0.10	%	2,061,226		4,688	0.46	%
Time deposits	1,538,489		6,959	0.91	%	1,645,077		12,557	1.54	%
Borrowed funds (f)	260,888		2,825	2.17	%	305,910		1,005	0.66	%
Junior subordinated debentures	128,850		1,278	1.96	%	124,638		1,875	2.98	%
Total interest-bearing liabilities	9,445,432		14,391	0.31	%	8,056,477		23,619	0.59	%
Noninterest-bearing demand deposits (g)	2,921,343					2,022,177
Noninterest-bearing liabilities	256,748					575,658

Total liabilities	12,623,523					10,654,312

Shareholders' equity	1,549,755					1,439,489

Total liabilities and shareholders' equity	$	14,173,278				$	12,093,801

Net interest income/Interest rate spread			197,470	2.94	%			186,607	3.37	%

Net interest-earning assets/Net interest margin	$	3,624,112		3.02	%	$	2,628,077		3.49	%

Ratio of interest-earning assets to interest-bearing liabilities	1.38X					1.33X


(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, collateralized borrowings and subordinated debt.
(g)	Average cost of deposits were 0.17% and 0.43%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields were: Loans — 3.83% and 4.20%, respectively; Investment securities — 1.43% and 2.34%, respectively; Interest-earning assets — 3.23% and 3.93%, respectively. GAAP basis net interest rate spreads were 2.92% and 3.34%, respectively; and GAAP basis net interest margins were 3.00% and 3.47%, respectively.