What changed in this filing

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Item 1. Business

2022-02-25 compared with 2021-02-26 · 160 added, 158 removed, 341 unchanged (48% of the section changed)

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Northwest Bancshares, Inc., a Maryland corporation, was incorporated in September 2009 to be the successor corporation to Northwest Bancorp, Inc., the former stock holding company for Northwest Bank, upon completion of the mutual-to-stock conversion of Northwest Bancorp, MHC.

The terms “Northwest”, “the Company”, “we”, “us” and “our” refer to Northwest Bancshares, Inc.

The terms “Northwest”, “the Company”, “we”, “us” and “our” refer to Northwest Bancshares, Inc., unless indicated otherwise by the context.

The conversion was completed December 18, 2009 when the Company sold 68,878,267 shares of common stock at $10.00 per share in the related offering.

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As of December 31, 2021, the Company had 126,612,183 shares outstanding and a market capitalization of approximately $1.793 billion.

Our executive offices are located at 100 Liberty Street, Warren, Pennsylvania 16365.

Our telephone number at this address is (814) 726-2140.

Our executive offices are located at 3 Easton Oval, Suite 500, Columbus, Ohio 43219.

We also maintain administrative offices located at 100 Liberty Street, Warren, Pennsylvania 16365.

The telephone number for these addresses is (814) 726-2140.

The Company’s website (www.northwest.com) contains a direct link to Northwest Bancshares, Inc.’s filings with the Securities and Exchange Commission, including copies of annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these filings, if any.

Information on our website shall not be considered a part of this report.

Copies of our filings may be obtained, without charge, by written request to Shareholder Relations, P.O.

Box 128, Warren, Pennsylvania 16365.

Copies of our filings may be obtained, without charge, by written request to Shareholder Relations, 100 Liberty Street, P.O.

Box 128, Warren, Pennsylvania 16365, or emailing shareholderrelations@northwest.com.

Northwest Bank

Northwest Bank is a Pennsylvania-chartered stock savings bank headquartered in Warren, Pennsylvania, which is located in northwestern Pennsylvania.

Northwest Bank is a community-oriented financial institution offering personal and business banking solutions, investment management and trust services and insurance products.

Northwest Bank is a Pennsylvania-chartered savings bank headquartered in Warren, Pennsylvania, which is located in northwestern Pennsylvania.

Northwest Bank is a community-oriented financial institution offering personal and business banking solutions, investment management and trust services.

Northwest Bank’s mutual savings bank predecessor was founded in 1896.

As of December 31, 2020, Northwest Bank operated 170 community-banking locations throughout its market area in central and western Pennsylvania, western New York and eastern Ohio.

Northwest Bank also offers investment management and trust services and employee benefits and property and casualty insurance.

As of December 31, 2021, Northwest Bank operated 170 community-banking locations throughout its market area in Pennsylvania, western New York, eastern Ohio, and Indiana.

Our principal lending activities are the origination of loans secured by first mortgages on owner-occupied, one-to-four-family residences, shorter term consumer loans, and commercial business and commercial real estate loans.

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Our principal expenses are the cost of employee compensation and benefits and the interest paid on deposits and borrowed funds.

Northwest Bank’s principal executive office is located at 100 Liberty Street, Warren, Pennsylvania 16365, and its telephone number at that address is (814) 726-2140.

Northwest Bank’s principal executive office is located at 100 Liberty Street, Warren, Pennsylvania 16365, and the telephone number at that address is (814) 726-2140.

Market Area and Competition

We are headquartered in northwestern Pennsylvania and have expanded primarily through acquisitions, into the southwestern and central regions of Pennsylvania, as well as western New York, northeastern Ohio, and Indiana.

As of December 31, 2020, we operated 100 community banking locations in Pennsylvania, 14 community banking offices in Ohio, 31 community banking offices in New York, and 25 community banking locations in Indiana.

Northwest Bank is headquartered in northwestern Pennsylvania and has expanded primarily through acquisitions, into the southwestern and central regions of Pennsylvania, as well as western New York, northeastern Ohio, and Indiana.

As of December 31, 2021, we operated 170 community banking locations across these market areas.

All of the aforementioned market areas are served by a number of competing financial institutions.

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We expect continued competition from these financial institutions in the foreseeable future.

With the continued acceptance of internet banking by our customers and consumers generally, competition for deposits has increased from institutions operating outside of our market area as well as from insurance companies.

With the continued acceptance of internet banking by our customers and consumers generally, competition for deposits has increased from institutions operating outside of our market area.

The following description of our market area is based upon information obtained from SNL Securities, the Bureau of Labor Statistics, the Federal Housing Financial Agency and the Mortgage Bankers Association.

Pennsylvania Market Area .

Our retail branch network within the state of Pennsylvania encompasses 28 counties.

Our retail branch network of 100 community banking offices within the state of Pennsylvania encompasses 28 counties.

Our western Pennsylvania market has a diverse economy driven by healthcare and education industries, service businesses, technology companies and small manufacturing operations.

Our southeastern Pennsylvania market is primarily driven by service businesses but also serves as a bedroom community to the cities of Baltimore, Maryland and Philadelphia, Pennsylvania.

Pennsylvania is a stable banking market with a total population of approximately 12.8 million and total households of approximately 1.9 million as of December 31, 2020.

Our Pennsylvania market area has a total population of approximately 4.6 million and total households of approximately 1.9 million as of December 31, 2021.

The Pennsylvania markets in which we operate our retail branches contain approximately half of Pennsylvania’s population and a similar percentage of households.

These markets have experienced a 1.9% decrease in population between 2010 and 2021.

As of December 31, 2020, the market's average median household income had decreased over the last year by 0.1%, to $57,475, compared to the national median income level of $67,761.

As of December 31, 2021, the market’s average median household income has increased over the last year by 8.5%, to $62,382, compared to the national median income level of $72,465.

The household income growth rate in Pennsylvania of 11.4%, is projected to be slightly below the national average growth rates during the next five years of 12.1%.

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Our New York market area has a total population of approximately 2.2 million and total households of approximately 911,000 as of December 31, 2021.

This area has experienced a decrease in population between 2011 and 2020, of 1.76%.

This area has experienced an increase in population between 2010 and 2021, of 2.79%.

The average median household income in this market increased by 5.3% over the last year to $64,326 as of December 31, 2021, compared to the national median income level of $72,465.

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Northeastern Ohio Market Area .

Our branch network includes two counties in northeastern Ohio, including the Cleveland metro area.

Our retail branch network of 14 community banking offices includes two counties in northeastern Ohio, including the Cleveland metro area.

The major employment sectors in this market are similar to the contiguous market in western Pennsylvania.

Our Ohio market area has a total population of approximately 2.4 million and total households of approximately 1 million as of December 31, 2020.

Our Ohio market area has a total population of approximately 860,000 and total households of approximately 353,000 as of December 31, 2021.

This area has experienced an increase in population between 2010 and 2021, of 4.7%.

The median household income for our Ohio market increased 8.1% over the last year to $64,056 as of December 31, 2020, compared to the national median income level of $67,761.

The median household income for our Ohio market decreased 0.1% over the last year to $63,988 as of December 31, 2021, compared to the national median income level of $72,465.

As of December 31, 2021, the unemployment rate for our Ohio market was 3.65%, compared to the national average of 3.9%.

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Indiana Market Area .

Our branch network includes eight counties in Indiana.

Our retail branch network of 25 community banking offices includes eight counties in Indiana.

This market has a diverse economy driven by healthcare and education industries, service businesses, technology companies and small manufacturing operations.

Our Indiana market area has a total population of approximately 1.9 million and total households of approximately 719,000 as of December 31, 2020.

This area has experienced an increase in population between 2011 and 2020, of 1.36%.

Our Indiana market area has a total population of approximately 945,000 and total households of approximately 364,000 as of December 31, 2021.

This area has experienced a decrease in population between 2010 and 2021, of 1.42%.

The median household income for our Indiana market is $56,661 as of December 31, 2021, compared to the national median income level of $72,465.

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We also retain servicing on some of the mortgage loans we sell which generates monthly service fee income.

We generally retain in our portfolio all consumer loans that we originate while we periodically sell participations in the multi-family residential, commercial real estate or commercial business loans that we originate in an effort to reduce the concentration of certain individual credits and the risk associated with certain businesses, industries or geographies.

We generally retain in our portfolio all consumer loans that we originate while we periodically sell participation loans in the multi-family residential, commercial real estate or commercial business loans that we originate in an effort to reduce the concentration of certain individual credits and the risk associated with certain businesses, industries or geographies.

Residential Mortgage Loans .

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Such regulations permit a maximum loan-to-value of 95% for residential properties and 80% for all other real estate secured loans.

We generally limit the maximum loan-to-value on both fixed- and adjustable-rate residential mortgage loans without private mortgage insurance, to 80% of the lesser of appraised values or purchase prices of real estate serving as collateral for our mortgage loans.

We generally limit the maximum loan-to-value on both fixed-rate and adjustable-rate residential mortgage loans without private mortgage insurance, to 80% of the lesser of appraised values or purchase prices of real estate serving as collateral for our mortgage loans.

Limited special financing programs allow for insured loans with loan-to-value ratios of up to 97%, and uninsured loans with loan-to-value ratios up to 100%.

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Our residential mortgage loans customarily include due-on-sale clauses, which are provisions giving us the right to declare loans immediately due and payable in the event, among other things, borrowers sell or otherwise dispose of underlying real properties serving as collateral for loans.

Home Equity Loans .

Home Equity Loans and Lines of Credit .

Generally, our home equity loans are secured by the borrower’s principal residence with a maximum loan-to-value ratio, including the principal balances of both the first and second mortgage loans, of 90% or less.

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At December 31, 2021, a significant portion of our multi-family commercial real estate and commercial real estate loans were secured by properties located within our market area.

Our largest commercial relationship with an aggregate total exposure of $131.4 million as of December 31, 2020, comprised our largest multi-family commercial real estate loan relationship with $77.3 million of the total exposure attributed to multi-family commercial.

While a portion of this exposure did seek COVID-19 related deferrals at some point during 2020, those deferrals have expired and all loans were performing in accordance with their terms as of December 31, 2020.

Our largest commercial relationship with an aggregate total exposure of $129.5 million as of December 31, 2021, comprised of student housing, medical, senior housing, office, industrial, retail, aerospace and transportation engineering, the largest of which is $37.6 million of the total exposure attributed to multi-family residential.

All loans were performing in accordance with their terms as of December 31, 2021.

Our largest commercial real estate loan relationship as of December 31, 2021 had an aggregate total exposure of $127.7 million, of which $ 125.6 million was comprised of commercial real estate loans.

These loans are secured by retail space, office space, hotels, self-storage, restaurant, and a charter school.

Some of these loans have received COVID-19 related deferrals and a few continue to operate under these deferrals.

All of the loans in this relationship are performing in accordance with their agreed upon terms as of December 31, 2020.

All the loans in this relationship are performing in accordance with their agreed upon terms as of December 31, 2021.

Multi-family commercial and commercial real estate loans are offered with both adjustable and fixed interest rates.

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We offer commercial loans to finance various activities in our market area, some of which are secured in part by additional real estate collateral.

At December 31, 2020, our largest commercial loan relationship had an aggregate total exposure of $90.8 million, and was secured with business assets.

At December 31, 2021, our largest commercial loan relationship had an aggregate total exposure of $49.4 million, and was secured by a sports franchise.

This loan was performing in accordance with their agreed upon terms as of December 31, 2021.

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In the case of a real estate loan, either an in-house appraiser, or an approved external appraiser, appraises the real estate intended to secure the proposed loan.

A loan processor checks the loan document file for accuracy and completeness and verifies the information provided.

For certain home equity loans we may use an approved alternative valuation such as an assessed value or Affordable Market Value (AMV).

A loan underwriter checks the loan document file for accuracy and completeness and verifies the information provided.

For our personal loans, including residential mortgage loans, home equity loans and lines of credit, automobile loans, credit cards and other unsecured loans, we have implemented a credit approval process based on a laddered individual loan authority system.

Real estate secured loans are underwritten centrally by our underwriting team.

Non-real estate loans are underwritten by local loan officers who are granted various levels of authority based on their lending experience and expertise.

Non-real estate loans are underwritten by both local loan officers or a centralized underwriting team who are granted various levels of authority based on their lending experience and expertise.

These authority levels are reviewed by the Credit Committee on at least an annual basis.

Aggregate credit exposures over $1.0 million are underwritten by Credit Administration.

For commercial loans, aggregate credit exposures over $1.0 million are underwritten by Credit Administration.

Our commercial loan policy assigns individual lending limits for our various commercial loan officers and dual authority consisting of an individual from Commercial Lending and Credit Administration.

Lending authorities are established by the Credit Committee.

The Senior Loan Committee may approve extensions of credit in excess of the maximum dual authority.

The Credit Committee meets quarterly to review the assigned lending limits and to monitor our lending policies, loan activity, economic conditions and concentrations of credit.

Our general policy is to make no loans either individually or in the aggregate to one customer in excess of $30.0 million.

The Senior Loan Committee meets weekly to approve extensions of credit in excess of the maximum dual authority limits.

The Credit Committee meets monthly to review the assigned lending limits and to monitor our lending policies, loan activity, economic conditions, and concentrations of credit.

Our general policy is to make no loans, either individually or in the aggregate to one borrower or single source of repayment, in excess of $30.0 million.

The Aggregate Credit Exposure limit is $100.0 million.

Under certain circumstances, for instance well-qualified customers or customers with multiple individually qualified projects, this limit may be exceeded subject to the approval of the Senior Loan Committee.

Loans exceeding $5.0 million or unusual loan requests are reviewed with the Risk Management Committee of the Board of Directors at each quarterly meeting.

Criticized/classified loans exceeding $5.0 million or unusual loan requests are reviewed with the Risk Management Committee of the Board of Directors at each quarterly meeting.

In addition, the Chief Credit Officer has the authority to require that the Board of Directors review any loan that has been approved by the Senior Loan Committee with which the Chief Credit Officer has specific concerns.

Fire and casualty insurance is required at the time the loan is made and throughout the term of the loan, and flood insurance is required as determined by regulation.

After a loan is approved, a loan commitment letter is promptly issued to the borrower.

At December 31, 2021, we had commitments to originate $335.7 million of loans.

The commitment letter specifies the terms and conditions of the proposed loan including the amount, interest rate, amortization period, maturity, a description of the required collateral and required insurance coverage.

Property searches are requested, as needed, on all loans secured by real property.

Loan Origination Fees and Costs .

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Loans-to-One Borrower .

As of December 31, 2020, the largest aggregate amount loaned to one borrower, or related borrowers, totaled $131.4 million in exposure and was secured by student housing, retail space, office space and commercial development.

Our second largest lending relationship totaled $105.4 million in exposure and was secured by a hotel, retail space, office space, multi-family, a charter school, self-storage, and a restaurant.

Our third largest commercial relationship totaled $90.8 million in exposure and was secured by hotels, senior housing, and office space.

Our fourth largest commercial relationship totaled $81.1 million in exposure and was secured by student housing, medical space, senior housing, office space, industrial, and retail space.

Our fifth largest commercial relationship totaled $51.9 million in exposure and was secured by student housing.

As of December 31, 2021, the largest aggregate amount loaned to one borrower, or related borrowers, totaled $129.5 million in exposure and was secured by student housing, medical space, senior housing, office space, industrial, aerospace and transportation engineering and retail space.

Our second largest lending relationship totaled $127.7 million in exposure and was secured by student housing, retail space, office space and commercial development.

Our third largest commercial relationship totaled $88.5 million in exposure and was secured by a hotel, retail space, office space, multi-family, a charter school, self-storage, and a restaurant.

Our fourth largest commercial relationship totaled $82.3 million in exposure and was secured by hotels, senior housing, and office space.

Our fifth largest commercial relationship totaled $49.4 million in exposure and was secured by a sports franchise.

All of these loans were performing in accordance with their terms at December 31, 2021.

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As of December 31, 2021, we had deposits through the CDARS program with an aggregate balance of $2.9 million.

Deposit account terms vary according to the

minimum balance required, the period of time during which the funds must remain on deposit, and the interest rate, among other factors.

In addition, we acquired brokered certificates

of deposit in the MutualBank transaction that have yet to mature.

The deposits have a balance of $11.4 million as of December 31, 2021.

Deposit account terms vary according to the minimum balance required, the period of time during which the funds must remain on deposit, and the interest rate, among other factors.

We regularly execute changes in our deposit rates based upon general market interest rates, competition, and liquidity requirements.

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In addition to the FHLB, we have borrowing facilities with the Federal Reserve Bank, three correspondent banks and we borrow funds, in the form of corporate repurchase agreements, from municipalities, corporations and school districts.

Northwest Bank is a member of the FHLB of Pittsburgh, and, due to the acquisition of MutualBank, is also a member of the FHLB of Indianapolis.

Northwest Bank is a member of the FHLB of Pittsburgh and Indianapolis.

The FHLB functions as a central bank providing credit for Northwest Bank and other member financial institutions.

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

The subordinated notes, which qualify as Tier 2 capital, bear interest at an annual rate of 4.00%, payable semi-annually in arrears commencing on March 15, 2021, and a floating rate of interest equivalent to the 3-month Secured Overnight Financing Rate ("SOFR") plus 3.89% payable quarterly in arrears commencing on December 15, 2025.

The subordinated notes, which qualify as Tier 2 capital, bear interest at an annual rate of 4.00%, payable semi-annually in arrears commencing on March 15, 2021, and a floating rate of interest equivalent to the 3-month Term Secured Overnight Financing Rate ( “ SOFR”) plus 3.89% payable quarterly in arrears commencing on December 15, 2025.

The subordinated debt issuance costs of approximately $1.8 million are being amortized over five years on a straight-line basis into interest expense.

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At December 31, 2021, Northwest Bank had five active wholly-owned subsidiaries;

Great Northwest Corporation, Allegheny Services, Inc., Northwest Capital Group, Inc., The Bert Company, and Mutual Federal Investment Company.

Great Northwest Corporation, Allegheny Services, Inc., Northwest Capital Group, Inc., Mutual Federal Interest Corporation, and Northwest Settlement Agency, LLC.

For financial reporting purposes all of these companies are included in the Consolidated Financial Statements of Northwest Bancshares, Inc.

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At December 31, 2021, Northwest Bank had an equity investment of $11.6 million in Northwest Capital Group, Inc., with a $13,000 net loss reported for the year ended December 31, 2021.

The Bert Company (doing business as Northwest Insurance Services) is an employee benefits and property and casualty insurance agency specializing in commercial and personal insurance as well as retirement benefit plans.

At December 31, 2020, Northwest Bank had an equity investment of $12.2 million in The Bert Company and for the year ended December 31, 2020, The Bert Company had net income of $925,000.

Mutual Federal Investment Company, which is a Nevada corporation, holds and manages a portion of the Northwest Bank investment portfolio and consumer closed end first mortgage loans.

At December 31, 2020, Northwest Bank had an equity investment

in Mutual Federal Investment Company of $499.2 million.

For the year ended December 31, 2020, Mutual Federal Investment Company had net income of $4.3 million.

Mutual Federal Interest Corporation, which is a Nevada corporation, holds and manages a portion of the Northwest Bank investment portfolio and consumer closed-end first mortgage loans.

At December 31, 2021, Northwest Bank had an equity investment in Mutual Federal Interest Corporation of $498.5 million.

For the year ended December 31, 2021, Mutual Federal Interest Corporation had net income of $5.5 million.

Northwest Settlement Agency, LLC provides title insurance to borrowers of Northwest Bank and other lenders.

At December 31, 2021, Northwest Bank had an equity investment in Northwest Settlement Agency, LLC of $3.8 million.

For the year ended December 31, 2021, Northwest Settlement Agency, LLC had a net loss of $80,000.

Northwest Bank strategically ceased operating several business lines in prior periods.

The Bert Company (doing business as Northwest Insurance Services, which was sold April 30, 2021) was an employee benefits and property and casualty insurance agency specializing in commercial and personal insurance as well as retirement benefit plans.

At December 31, 2021, Northwest Bank had an equity investment of $28.2 million in The Bert Company.

Northwest Advisors, Inc., a federally registered investment advisor, which provided investment management programs and investment portfolio planning services, ceased operations and became inactive during 2018.

At December 31, 2021, Northwest Bank had an equity investment in Northwest Advisors, Inc.

of $1.7 million.

Northwest Settlement Agency, LLC ceased writing new title insurance business during the fourth quarter of 2016 and ceased operations and became inactive during 2017.

At December 31, 2020, Northwest Bank had an equity investment in Northwest Settlement Agency, LLC of $3.9 million.

Northwest Financial Services, Inc.

provided retail brokerage services which became inactive during the fourth quarter of 2017.

provided retail brokerage services and became inactive during the fourth quarter of 2017.

At December 31, 2021, Northwest Bank had an equity investment in Northwest Financial Services of $9.4 million.

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As of December 31, 2021, we had 2,251 full-time and 162 part-time employees, or 2,332 full-time equivalent employees ( “ FTEs”).

This represents an increase of 212 FTEs, or 9.6%, from December 31, 2019 when we had 2,084 full-time and 249 part-time employees, or 2,209 FTEs.

This increase is due to the acquisition of MutualBank on April 24, 2020 as well as an increase in our organic employee population as we add additional talent to support our growing company.

This represents a decrease of 89 FTEs, or 3.7%, from December 31, 2020 when we had 2,318 full-time and 205 part-time employees, or 2,421 FTEs.

This decrease is a result of our efforts to optimize our retail network.

As a financial institution, approximately 44% of our employee population are employed at our 170 banking offices across Pennsylvania, New York, Ohio and Indiana and approximately 4% are employed at our customer call centers.

Our turnover rate was 28.5% as of December 31, 2020.

Our annual turnover rate was 30.2% as of December 31, 2021.

None of our employees are represented by a collective bargaining group.

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We believe that an environment where all employees can contribute, innovate and thrive is key to our success in the future.

With the goal of continuing to deliver an inclusive and diverse environment at Northwest, we have developed the Northwest Inclusion Council which consists of 18 leaders throughout our Company’s footprint.

With the goal of continuing to deliver an inclusive and diverse environment at Northwest, we have developed the Northwest Inclusion Council which consists of senior advisors and leaders throughout our Company’s footprint.

This council is focused on engaging our entire employee population and leveraging their diverse talents and perspectives to uphold our Company’s core values.

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Throughout this pandemic, we committed to take every measure and precaution to protect our employees while continuing to serve our customers and being mindful of the fiduciary responsibility we have to our shareholders.

We committed to our employees to continue to provide full pay and benefits throughout this crisis.

Through incredible teamwork and adaptability of our workforce, we were able to establish remote capabilities for our personnel to work virtually through this pandemic, with approximately 75% of our back-office and regional headquarter personal working fully remote.

Compensation and Benefits.

Our compensation program is designed to attract and retain talented individuals to support our business objectives and achieve our strategic goals.

We provide employees with compensation packages that include base salaries, annual bonuses and incentive stock compensation.

In addition, we also offer employees a 401(k) Plan with an employer match contribution, healthcare and insurance benefits, flexible spending accounts, paid time off, and family leave.

We provide employees with compensation packages that include base salaries, and if eligible, incentive compensation, annual bonuses and incentive stock benefits.

In addition, we also offer employees a 401(k) Plan with an employer match contribution, medical, dental, disability, life, wellness plan, employee assistance plan, paid time off, flexible spending accounts, and voluntary benefits.

SUPERVISION AND REGULATION

As a savings and loan holding company, we are required to comply with the rules and regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and are also required to file certain reports with and are subject to examination by the Federal Reserve Board.

As a bank holding company, we are required to comply with the rules and regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and are also required to file certain reports with and are subject to examination by the Federal Reserve Board.

We are also subject to the rules and regulations of the Securities and Exchange Commission under the federal securities laws.

Northwest Bank is a Pennsylvania-chartered stock savings bank and our deposit accounts are insured up to applicable limits by the FDIC’s Deposit Insurance Fund (the “DIF”).

Northwest Bank is subject to extensive regulation by the Department of Banking and Securities of the Commonwealth of Pennsylvania (the “Department of Banking”), as its chartering agency, and by the FDIC, as the insurer of its deposit accounts.

Northwest Bank must file reports with the Department of Banking and the FDIC concerning its activities and financial condition in addition to obtaining regulatory approvals prior to entering into certain transactions including acquisitions of other financial institutions.

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Additionally, when the consolidated assets of a financial institution and its holding company exceed $10 billion, the financial institution becomes subject to additional statutory and regulatory requirements that will result in additional costs.

This includes enhanced risk management and corporate governance processes, stress-testing based on scenarios specified by the federal regulatory agencies and examination for compliance with federal financial consumer protection laws by the Consumer Financial Protection Bureau ("CFPB") rather than the FDIC.

This includes enhanced risk management and corporate governance processes, and examination for compliance with federal financial consumer protection laws by the Consumer Financial Protection Bureau (“CFPB”) rather than the FDIC.

As of December 31, 2021, our consolidated assets were $14.502 billion.

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Pennsylvania Savings Bank Law

The Pennsylvania Banking Code of 1965, as amended (the “Banking Code”) contains detailed provisions governing the organization, operations, corporate powers, savings and investment authority, branching rights and responsibilities of directors, officers and employees of Pennsylvania savings banks.

The Pennsylvania Banking Code of 1965, as amended (the “Banking Code”) contains detailed provisions governing the organization, operations, corporate powers, savings and investment authority, branching, and rights and responsibilities of directors, officers and employees of Pennsylvania savings banks.

A Pennsylvania savings bank may locate or change the location of its principal place of business and establish an office anywhere in, or adjacent to, Pennsylvania, with the prior approval of the Department of Banking.

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The Department of Banking may also appoint a receiver or conservator for an institution in appropriate cases.

Federal Deposit Insurance

The FDIC currently maintains the DIF, which was created in 2006 through the merger of the Bank Insurance Fund and the Savings Association Insurance Fund.

The deposit accounts of our subsidiary bank are insured by the DIF to the maximum amount provided by law.

Loans-to-One Borrower Limitation

In accordance with the Banking Code, a Pennsylvania chartered savings bank, with certain limited exceptions, may lend to a single or related group of borrowers on an “unsecured” basis an amount equal to 15% of its capital accounts, the aggregate of capital, surplus, undivided profits, capital securities and reserve for credit losses.

The Northwest Bank Credit Committee has established an internal lending limit, either individually or in the aggregate to one customer, or a single source of repayment, of $30.0 million and Aggregate Credit Exposure of $100.0 million.

Under certain circumstances, for instance well qualified customers or customers with multiple individually qualified projects, this limit may be exceeded subject to the approval of the Senior Loan Committee.

December 31, 2021 we had ten credit relationships that were equal to or exceeded our $30.0 million internal limit for individual borrower and two credit relationships that were equal to or exceeded the $100.0 million internal limit for Aggregate Credit Exposure.

The Company’s ability to pay dividends depends, to a large extent, upon Northwest Bank’s ability to pay dividends to the Company.

The Banking Code states that no dividend may be paid out of surplus without approval of the Department of Banking.

Dividends may be paid out of accumulated net earnings.

No dividend may generally be paid that would result in Northwest Bank failing to comply with its regulatory capital requirements.

Federal Banking Regulation

Northwest Bank is also subject to extensive regulation, examination and supervision by the FDIC, as its primary federal regulator.

Such regulation and supervision:

• Limits the activities and investment authority of Northwest Bank;

• Establishes a continuing and affirmative obligation, consistent with Northwest Bank’s safe and sound operation, to help meet the credit needs of its community, including low and moderate income neighborhoods;

• Establishes various capital categories resulting in various levels of regulatory scrutiny applied to the institutions in a particular category;

• Establishes standards for safety and soundness.

The FDIC is required by law to examine each regulated institution every twelve months.

The FDIC has the authority to order any savings bank and its directors, officers, attorneys or employees to discontinue any violation of law or unsafe or unsound banking practice.

Insurance of Deposit Accounts

The deposit accounts of Northwest Bank are insured by the DIF to the maximum amount provided by law.

The FDIC insures deposits up to the standard maximum deposit insurance amount of $250,000.

This insurance is backed by the full faith and credit of the United States Government.

As insurer, the FDIC is authorized to conduct examinations of and to require reporting by DIF-insured institutions.

It also may prohibit any DIF-insured institution from engaging in any activity the FDIC determines by regulation or order to pose a serious threat to the DIF.

The FDIC also has the authority to take enforcement actions against insured institutions.

The FDIC charges insured depository institutions premiums to maintain the DIF.

Under the FDIC’s original risk-based assessment system, insured institutions were assigned a risk category based on supervisory evaluations, regulatory capital levels and certain other factors.

An institution’s rate depended upon the category to which it is assigned, and certain adjustments specified by FDIC regulations.

Institutions deemed less risky pay lower FDIC assessments.

Assessments for most institutions are now based on financial measures and supervisory ratings derived from statistical modeling estimating the probability of failure within three years.

In conjunction with the DIF reserve ratio achieving 1.15%, the assessment range was reduced for most banks and savings associations of less than $10 billion in total assets to 1.5 basis points from 30 basis points (inclusive of possible adjustments), effective July 1, 2016.

The Dodd-Frank Act specified that banks with greater than $10 billion in assets be required to bear the burden of raising the reserve ratio from 1.15% to 1.35%.

Such institutions were subject to an annual surcharge of 4.5 basis points of total assets exceeding $10 billion.

The FDIC indicated that the 1.35% ratio was exceeded in November 2018.

The Dodd-Frank Act eliminated the 1.5% maximum fund ratio, instead leaving it to the discretion of the FDIC, and the FDIC has exercised that discretion by establishing a long-range fund ratio of 2%.

Under the FDIC’s risk-based assessment system, insured institutions deemed less risky pay lower FDIC assessments.

Assessments for institutions with $10 billion or more of assets are primarily based on a scorecard approach by the FDIC, including factors such as examination ratings and modeling measuring the institution’s ability to withstand asset-related and funding-related stress and potential loss to the DIF should the bank fail.

The assessment range (inclusive of possible adjustments specified by the regulations) for institutions with greater than $10 billion of total assets is 1.5 to 40 basis points.

Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged or is engaging in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC or written agreement entered into with the FDIC.

The management of the Bank does not know of any practice, condition or violation that might lead to termination of deposit insurance.

The management of Northwest Bank does not know of any practice, condition or violation that might lead to termination of deposit insurance.

Capital Requirements

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Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations.

The company did exercise this opt-out election during the year ended December 31, 2021.

In assessing an institution’s capital adequacy, the FDIC takes into consideration not only these numeric factors but qualitative factors as well, and has the authority to establish higher capital requirements for individual institutions where deemed necessary.

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Such action, through enforcement proceedings or otherwise, may require a variety of corrective measures.

The regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum risk-based capital requirements.

The capital conservation buffer requirement was phased in beginning January 1, 2016 at 0.625% of risk-weighted assets and increased each year until fully implemented at 2.5% on January 1, 2019.

In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum risk-based capital requirements.

The following table shows the Basel III regulatory capital levels that must be maintained to avoid limitations on capital distributions and discretionary bonus payments, effective January 1, 2019.

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Total risk-based capital ratio plus capital conservation buffer 10.500 %

As of December 31, 2021, Northwest Bank’s capital exceeded all applicable regulatory requirements and it had an appropriate capital conservation buffer.

Northwest Bank is also subject to capital guidelines of the Department of Banking.

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Performance under the capital restoration plan must be guaranteed by the parent holding company up to the lesser of the amount of the capital deficiency when deemed undercapitalized or 5% of the institution’s total assets.

Federal regulations also specify circumstances under which a federal banking agency may reclassify a well capitalized institution as adequately capitalized, and may require an adequately capitalized institution to comply with supervisory actions as if it were in the next lower category (except that the FDIC may not reclassify a significantly undercapitalized institution as critically undercapitalized).

reclassify a significantly undercapitalized institution as critically undercapitalized).

As of December 31, 2021, Northwest Bank was well-capitalized for this purpose.

Loans-to-One Borrower Limitation

The Credit Committee has established an internal lending limit, either individually or in the aggregate to one customer, of $30.0 million.

As of December 31, 2020 we had six credit relationships that were equal to or exceeded our $30.0 million internal limit.

Transactions with Affiliates

Transactions between Northwest Bank and its affiliates, including the Company, are limited by Sections 23A and 23B of the Federal Reserve Act, applicable to FDIC-insured state nonmember banks by Section 18(j) of the Federal Deposit Insurance Act, and its implementing regulations.

In general, transactions with affiliates must be on terms that are at least as favorable to the bank as comparable transactions with non-affiliates.

In addition, certain types of affiliate transactions are restricted to an aggregate percentage of the bank’s capital.

Certain transactions with affiliates are required to be secured by specified collateral.

Activities and Investments of Insured State-Chartered Banks

Federal law generally limits the activities and equity investments of state-chartered banks insured by the FDIC to those that are permissible for national banks.

Under regulations dealing with equity investments, an insured state bank generally may not, directly or indirectly, acquire or retain any equity investment of a type, or in an amount, that is not permissible for a national bank.

An insured state bank is not prohibited from, among other things:

(i) acquiring or retaining a majority interest in a subsidiary;

(ii) investing as a limited partner in a partnership the sole purpose of which is direct or indirect investment in the acquisition, rehabilitation, or new construction of a qualified housing project, provided that such limited partnership investments may not exceed 2% of the bank’s total assets;

(iii) acquiring up to 10% of the voting stock of a company that solely provides or reinsures liability insurance for directors, trustees or officers, or blanket bond group insurance coverage for insured depository institutions;

and (iv) acquiring or retaining the voting shares of a depository institution if certain requirements are met.

Activities of state banks and their subsidiaries are generally limited to those permissible for national banks.

Exceptions include where the bank meets applicable regulatory capital requirements and the FDIC determines that the proposed activity does not pose a significant risk to the DIF.

Federal law generally limits the activities as principal and equity investments of state-chartered banks insured by the FDIC and its subsidiaries to those that are permissible for national banks.

Before engaging in a new activity as principal that is not permissible for a national bank or otherwise permissible under federal law or FDIC regulations, an insured savings bank must seek approval from the FDIC to engage in such activity.

The FDIC will not approve the activity unless the savings bank meets its minimum capital requirements and the FDIC determines that the activity does not present a significant risk to the DIF.

Federal Home Loan Bank System

Northwest Bank is a member of the Federal Home Loan Bank System, which consists of 11 regional Federal Home Loan Banks.

The Federal Home Loan Bank System provides a central credit facility primarily for member institutions.

As a member of the Federal Home Loan Bank of Pittsburgh and the Federal Home Loan Bank of Indianapolis, Northwest Bank is required to acquire and hold share of capital stock in the Federal Home Loan Bank in specified amounts.

As of December 31, 2021, Northwest Bank was in compliance with this requirement.

The USA PATRIOT Act

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Holding Company Regulation

Federal law allows a state savings bank, such as Northwest Bank, to elect to be treated as a savings association for purposes of the savings and loan company provisions of the Home Owners’ Loan Act of 1933, as amended, provided that it qualifies as a “Qualified Thrift Lender.” Such election results in its holding company being regulated as a savings and loan holding company by the Federal Reserve Board rather than as a bank holding company.

Northwest Bank has made such an election.

Therefore, Northwest Bancshares, Inc.

is a savings and loan holding company within the meaning of the Home Owners’ Loan Act of 1933, as amended.

As such, we are registered as a savings and loan holding company with the Federal Reserve Board and are subject to Federal Reserve Board regulations, examinations, supervision and reporting requirements.

In addition, the Federal Reserve Board has enforcement authority over the Company and any non-savings institution subsidiaries of the Company.

Among other things, this authority permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a serious risk to the subsidiary savings institution.

Prior to March 31, 2021, Northwest Bancshares, Inc.

was regulated as a savings and loan holding company within the meaning of the Home Owners’ Loan Act of 1933, as amended (“HOLA”).

Federal law allows a state savings bank, such as Northwest Bank, to elect to be treated as a savings association, provided that it qualifies as a “Qualified Thrift Lender”.

Such election results in its holding company being regulated as a savings and loan holding company by the Federal Reserve Board rather than as a bank holding company.

Northwest Bank had previously made the Section 10(1) election, but revoked the election effective March 31, 2021.

Therefore, as of such date, Northwest Bancshares, Inc.

is regulated by the Federal Reserve Board as a bank holding company within the meaning of the Bank Holding Company Act of 1956, as amended (“Bank Holding Company Act”).

As a bank holding company, Northwest Bancshares, Inc.

is subject to regulation, examination and supervision by, and periodic reporting to, the Federal Reserve Board.

The Federal Reserve Board has enforcement authority over the Company and any non-bank subsidiaries.

Among other things, this authority permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a risk to Northwest Bank.

Permissible Activities.

The business activities of Northwest Bancshares, Inc.

are generally limited to those activities permissible for financial holding companies under Section 4(k) of the Bank Holding Company Act of 1956, as amended, or for multiple savings and loan holding companies.

A financial holding company may engage in activities that are financial in nature, including underwriting equity securities and insurance as well as activities that are incidental to financial activities or complementary to financial activities.

The Dodd-Frank Act and Federal Reserve Board regulations specify that a savings and loan holding company may only engage in financial holding company activities if it meets the qualitative criteria necessary for a bank holding company to engage in such activities and files an election with the Federal Reserve Board.

The Company’s activities are limited to the activities permissible for bank holding companies, which generally include activities deemed by the Federal Reserve Board to be closely related or a proper incident to banking or managing or controlling banks.

A bank holding company that meets certain criteria may elect to be regulated as a financial holding company and thereby engage in a broader array of financial activities, such as underwriting equity securities and insurance.

Northwest Bancshares, Inc.

has not chosen to be regulated as a financial holding company as of this time.

A multiple savings and loan holding company is generally limited to activities permissible for bank holding companies under Section 4(c)(8) of the Bank Holding Company Act, subject to the prior approval of the Federal Reserve Board, and certain additional activities authorized by Federal Reserve Board regulations.

Federal law prohibits a savings and loan holding company, including Northwest Bancshares, Inc., directly or indirectly, or through one or more subsidiaries, from acquiring more than 5% of another savings institution or holding company thereof, without prior written approval of the Federal Reserve Board.

It also prohibits, with certain exceptions, the acquisition or retention of more than 5% of a non-subsidiary company engaged in activities that are not closely related to banking or financial in nature, or acquiring or retaining control of an institution that is not federally insured.

In evaluating applications by holding companies to acquire savings institutions, the Federal Reserve Board must consider, among other factors, the financial and managerial resources and future prospects of the company and institution involved, the effect of the acquisition on the risk to the DIF, the convenience and needs of the community and competitive factors.

The Federal Reserve Board is prohibited from approving any acquisition that would result in a multiple savings and loan holding company controlling savings institutions in more than one state, subject to two exceptions:

(i) the approval of interstate supervisory acquisitions by savings and loan holding companies;

(ii) the acquisition of a savings institution in another state if the laws of the state of the target savings institution specifically permit such acquisition.

The states vary in the extent to which they permit interstate savings and loan holding company acquisitions.

Qualified Thrift Lender Test .

To be regulated as a savings and loan holding company (rather than as a bank holding company), Northwest Bank must qualify as a Qualified Thrift Lender.

To qualify as a Qualified Thrift Lender, Northwest Bank must be a “domestic building and loan association,” as defined in the Internal Revenue Code, or comply with the Qualified Thrift Lender test.

Under the Qualified Thrift Lender test, a savings institution is required to maintain at least 65% of its “portfolio assets” (total assets less:

(1) specified liquid assets up to 20% of total assets;

(2) intangibles, including goodwill;

and (3) the value of property used to conduct business) in certain “qualified thrift investments” (primarily residential mortgages and related investments, including certain mortgage-backed and related securities) in at least nine months out of each 12-month period.

As of December 31, 2020, Northwest Bank met the Qualified Thrift Lender test.

Capital Requirements.

Savings and loan holding companies had not historically been subjected to consolidated regulatory capital requirements.

However, the Dodd-Frank Act required the Federal Reserve Board to establish, for all depository institution holding companies, minimum consolidated capital levels that are as stringent as those required for the insured depository subsidiaries.

Consolidated regulatory capital requirements identical to those applicable to the subsidiary depository institutions apply to savings and loan holding companies (of greater than $3 billion in consolidated assets).

has not elected to be regulated as a financial holding company.

Federal law prohibits a bank holding company, including Northwest Bancshares, Inc., from acquiring, directly or indirectly, more than 5% of a class of voting securities of, or all or substantially all of the assets of, another bank or bank holding company, without prior written approval of the Federal Reserve Board.

In evaluating applications by bank holding companies to acquire banks,

the Federal Reserve Board considers, among other factors, the financial and managerial resources and future prospects of the parties, the effect of the acquisition on the risk to the DIF, the convenience and needs of the community, competitive factors and compliance with anti-money laundering laws.

Bank holding companies with greater than $3 billion in total consolidated assets are subject to consolidated regulatory capital requirements identical to those applicable to the subsidiary depository institutions.

As is the case with institutions themselves, the capital conservation buffer was phased in between 2016 and 2019.

Northwest Bancshares, Inc.

was in compliance with the holding company capital requirements and the capital conservation buffer throughout the transition period between 2016 and 2019.

Source of Strength/Capital Distributions.

The Dodd-Frank Act extended to savings and loan holding companies the Federal Reserve Board’s “source of strength” doctrine, which has long applied to bank holding companies.

The Federal Reserve Board has promulgated regulations implementing the “source of strength” policy, which requires holding companies to act as a source of strength to their subsidiary depository institutions by providing capital, liquidity and other support in times of financial stress.

The Federal Reserve Board has issued a policy statement regarding capital distributions by bank holding companies that it has made applicable to savings and loan holding companies as well.

In general, the policy provides that dividends should be paid only out of current earnings and only if the prospective rate of earnings retention by the holding company appears consistent with the organization’s capital needs, asset quality and overall financial condition.

The ability of a holding company to pay dividends may be restricted if a subsidiary depository institution becomes undercapitalized.

Regulatory guidance provides for prior regulatory consultation with respect to dividends in certain circumstances, such as where the company’s net income for the past four quarters, net of dividends previously paid over that period, is insufficient to fully fund the dividend or the company’s overall rate of earnings retention is inconsistent with the company’s capital needs and overall financial condition.

The guidance similarly provides for regulatory review of stock repurchases or redemptions under certain circumstances.

These regulatory policies could affect our ability to pay dividends or otherwise engage in capital distributions, including stock repurchases.

As a subsidiary of a savings and loan holding company, Northwest Bank must notify the Federal Reserve Board thirty days before declaring any dividend to the Company.

The dividend notice may be objected to under certain circumstances, such as where the dividend raises safety or soundness concerns, the dividend would cause the savings bank to be undercapitalized or the dividend would violate a law, regulation, regulatory condition or enforcement order.

was in compliance with the holding company capital requirements and the capital conservation buffer as of December 31, 2021.

Source of Strength Doctrine.

The “source of strength doctrine” requires bank holding companies to provide assistance to their subsidiary depository institutions in the event the subsidiary depository institution experiences financial difficulty.

The Federal Reserve Board has issued regulations requiring that all bank holding companies serve as a source of financial and managerial strength to their subsidiary depository institutions.

Capital Distributions.

The Federal Reserve Board has issued a policy statement regarding the payment of dividends by bank holding companies.

Separate regulatory guidance provides for prior consultation with Federal Reserve Bank supervisory staff concerning dividends in certain circumstances, such as where the company’s net income for the past four quarters, net of dividends previously paid over that period, is insufficient to fully fund the dividend, the proposed dividend exceeds earnings for the period for which it is being paid, or the company’s overall rate of earnings retention is inconsistent with the company’s capital needs and overall financial condition.

The guidance also provides for prior consultation with supervisory staff for material increases in the amount of a bank holding company’s common stock dividend.

The ability of a bank holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized.

Federal Reserve Board regulatory guidance also indicates that a bank holding company should inform Federal Reserve Bank staff prior to redeeming or repurchasing common stock or perpetual preferred stock if the bank holding company is experiencing financial weaknesses or the repurchase or redemption would result in a net reduction, at the end of a quarter, in the amount of such equity instruments outstanding compared with the beginning of the quarter in which the redemption or repurchase occurred.

Federal Reserve Board regulations require prior approval for a bank holding company to repurchase or redeem its equity securities if the gross consideration, when combined with net consideration paid for all such repurchases or redemptions during the preceding 12 months, will equal 10% or more of the holding company’s consolidated net worth.

There is an exception for well-capitalized bank holding companies that meet specified qualitative criteria.

Federal Reserve Board guidance provides for prior consultation with supervisory staff and nonobjection under specified circumstances prior to a holding company repurchasing or redeeming regulatory capital instruments, including common stock, regardless of the applicability of the previously referenced notification requirement.

These regulatory policies may affect the ability of Northwest Bancshares, Inc.

to pay dividends, repurchase shares of its common stock or otherwise engage in capital distributions.

Acquisition of the Company.

Under the Change in Bank Control Act, no person may acquire control of a bank holding company, such as Northwest Bancshares, Inc., unless the Federal Reserve Board has been given 60 days’ prior written notice and has not issued a notice disapproving the proposed acquisition, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the competitive effects of the acquisition.

Control, as defined under the Change in Bank Control Act, means ownership, control of or power to vote 25% or more of any class of voting stock.

There is a rebuttable presumption of control upon the acquisition of 10% or more of a class of voting stock if the holding company involved has its shares registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or if no other person will own, control or hold the power to vote a greater percentage of that class of voting security after the acquisition.

A company that acquires control of a bank holding company, such as Northwest Bancshares, Inc., must receive prior Federal Reserve Board approval under the Bank Holding Company Act.

Control, as defined under the Bank Holding Company Act, means ownership, control or power to vote 25% or more of any class of voting stock, control in any manner over the election of a majority of the company’s directors, or a determination by the regulator that the acquirer has the power to exercise, directly or indirectly, a controlling influence over the management or policies of the company.

The Federal Reserve Board adopted a final rule, effective September 30, 2020, that revised its framework for determining whether a company, under the Bank Holding Company Act, exercises a “controlling influence” over a bank or a bank holding company.

The Federal Reserve Board’s final rule applies to questions of control under the Bank Holding Company Act but does not extend to the Change in Bank Control Act.

Federal Securities Laws

Our common stock is registered with the SEC under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Our common stock is registered with the SEC under Section 12(b) of the Exchange Act.

We are also subject to the proxy rules, tender offer rules, insider trading restrictions, annual and periodic reporting, and other requirements of the Exchange Act.

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The Sarbanes-Oxley Act of 2002 was enacted to increase corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies, and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws.

The Sarbanes-Oxley Act generally applies to all companies that file or are required to file periodic reports with the Securities and Exchange Commission, under the Securities Exchange Act of 1934.

As directed by the Sarbanes-Oxley Act, our Chief Executive Officer and Chief Financial Officer are required to certify that our quarterly and annual reports do not contain any untrue statement of a material fact.

The rules adopted by the Securities and Exchange Commission under the Sarbanes-Oxley Act have several requirements, including having these officers certify that:

they are responsible for establishing, maintaining and regularly evaluating the effectiveness of our internal control over financial reporting;

they have made certain disclosures to our auditors and the audit committee of the board of directors about our internal control over financial reporting;

and they have included information in our quarterly and annual reports about their evaluation and whether there have been changes in our internal control over financial reporting or in other factors that could materially affect internal control over financial reporting.

The Sarbanes-Oxley Act generally applies to all companies that file or are required to file periodic reports with the Securities and Exchange Commission, under the Exchange Act.

The Company has policies, procedures and systems designed to comply with these regulations.

FEDERAL AND STATE TAXATION

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These taxes are apportioned based upon the volume of business conducted in those states as a percentage of the whole.

Because a majority of Northwest Bank’s affairs are conducted in Pennsylvania, taxes paid to other states are not material.

A majority of Northwest Bank’s affairs are conducted in Pennsylvania;

however as the Company’s operational footprint expands, taxes paid to other states, such as New York (with a 6.5% rate) and Indiana (with a 6% rate) have grown slightly in significance.

The subsidiaries of Northwest Bank are subject to a Pennsylvania corporate net income tax and are also subject to other applicable taxes in the states where they conduct business.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business