What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-25 compared with 2021-02-26 · 466 added, 662 removed, 2199 unchanged (34% of the section changed)

16 unchanged sentences

We have audited Northwest Bancshares, Inc.

and subsidaries’ (the Company) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

24 unchanged sentences

We have audited the accompanying consolidated statements of financial condition of Northwest Bancshares, Inc.

and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three year period ended December 31, 2020, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three year period ended December 31, 2020, in conformity with U.S.

and subsidiaries (the Company) as of December 31, 2021 and December 31, 2020, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and December 31, 2020, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2021, in conformity with U.S.

generally accepted accounting principles.

17 unchanged sentences

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for credit losses for certain loans and off-balance sheet exposures

As discussed in Note 2 to the consolidated financial statements, the Company adopted ASU No.

2016-13, Financial Instruments— Credit Losses (ASC Topic 326) as of January 1, 2020.

As discussed in Notes 2 and 6 to the consolidated financial statements, the Company’s allowance for credit losses for loans and liability for credit losses for off-balance sheet

exposures was $134.4M and $6.4M, respectively, as of December 31, 2020, a portion which included the measure of expected credit losses on a collective (pool) basis for those loans and off-balance sheet exposures that share similar risk characteristics (the collective ACL).

Allowance for credit losses for loans evaluated on a collective basis

As discussed in Notes 1 and 5 to the consolidated financial statements, the Company’s allowance for credit losses for loans was $102.2M, as of December 31, 2021, a portion which included the measure of expected credit losses on a collective (pool) basis for those loans that share similar risk characteristics (the collective ACL).

The expected credit loss methodologies apply either a probability of default and loss given default loss assumption or a portfolio-level loss net charge-off rate assumption to loan level exposures on an undiscounted basis over the contractual term of the loans, adjusted for prepayments.

The Company uses a twelve-month reasonable and supportable forecast period, which is based on a probability-weighted multiple macroeconomic scenarios approach and reverts to historical average loss rates over a twelve-month period for the remaining life of the loans.

The Company uses a twenty-four-month reasonable and supportable forecast period, which is based on a probability-weighted multiple macroeconomic scenarios approach and reverts to historical average loss rates over a twelve-month period for the remaining life of the loans.

The following collective ACL modeling methodologies were developed for each significant loan portfolio segment:

1 unchanged sentence

(2) the allowance for credit losses within the vehicle loan portfolio is calculated at the portfolio-level using a vintage analysis to project portfolio-level net charge-off rates;

(3) the allowance for credit losses is calculated for commercial real estate and commercial small business loans at the portfolio-level using a regression model to project portfolio-level net charge-off rates as well as macroeconomic forecasts;

(3) the allowance for credit losses is calculated for commercial

real estate and commercial small business loans at the portfolio-level using a regression model to project portfolio-level net charge-off rates as well as macroeconomic forecasts;

and (4) the allowance for credit losses for the commercial real estate and commercial loan portfolio is calculated at loan-level using projected default and severity rates as well as macroeconomic forecasts determined at the pool level.

The credit losses for off-balance sheet exposures is calculated using default rates, severity rates, consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over their estimated life.

A portion of the collective ACL is comprised of adjustments to historical loss information for asset-specific risk characteristics to reflect the extent they do not exist in the historical loss information.

2 unchanged sentences

A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment of the collective ACL due to significant measurement uncertainty.

Specifically, the assessment encompassed the evaluation of the collective ACL methodologies, including the models and methods used to estimate (1) the default, severity, prepayments, and projected portfolio-level net charge-off rates, and their significant assumptions, including the macroeconomic forecast scenarios and economic assumptions, the reasonable and supportable forecast periods, and credit risk ratings for certain commercial loans, and (2) the qualitative factors and their significant assumptions, including adjustments to account for current and expected macroeconomic conditions.

Specifically, the assessment encompassed the evaluation of the collective ACL methodologies, including the models and methods used to estimate (1) the default, severity, prepayments, and projected portfolio-level net charge-off rates, and their significant assumptions, including the macroeconomic forecast scenarios and economic assumptions, and the reasonable and supportable forecast periods, and (2) the qualitative factors and their significant assumptions, including adjustments to account for current and expected macroeconomic conditions.

The assessment also included an evaluation of the conceptual soundness and performance of the models.

3 unchanged sentences

• development of the collective ACL methodologies

• development of the default, severity, prepayments, and projected portfolio-level net charge-off rate (model assumptions)

• identification and determination of the significant assumptions used in the models

• continued use and conceptual soundness of the default, severity, prepayments, and projected portfolio-level net charge-off rate (model assumptions)

• performance monitoring of the models

• development of the qualitative factors, including the significant assumptions used in the measurement of the qualitative factors

• determination and measurement of the significant assumptions used in the models

• determination of the qualitative factors, including the significant assumptions used in the measurement of the qualitative factors

• analysis of the collective ACL results, trends, and ratios.

7 unchanged sentences

• evaluating the length of the historical observation period and reasonable and supportable forecast by comparing them to specific portfolio risk characteristics and trends

• testing individual credit risk ratings for a selection of commercial loan borrower relationships by evaluating the financial performance of the borrower, sources of repayment, and any relevant guarantees or underlying collateral

• evaluating the methodology used to develop the qualitative factors and the effect of those factors on the collective ACL compared with relevant credit risk factors and consistency with credit trends.

• evaluating the methodology used to develop the qualitative factors and the effect of certain factors on the collective ACL compared with relevant credit risk factors and consistency with credit trends.

We also assessed the sufficiency of the audit evidence obtained related to the collective ACL by evaluating the cumulative results of the audit procedures, qualitative aspects of the Company’s accounting practices, and potential bias in the accounting estimate.

28 unchanged sentences

Borrowed funds 139,093 159,715

Subordinated debt 123,575 123,329

Junior subordinated debentures 129,054 128,794

36 unchanged sentences

Noninterest income:

Gain on sale of investments 236 50 157

Gain/(loss) on sale of investments ( 176 ) 236 50

Gain on sale of loans — 1,302 1,734

2 unchanged sentences

Insurance commission income 3,633 9,132 8,068

Loss on real estate owned, net ( 106 ) ( 53 ) ( 631 )

Gain/(loss) on real estate owned, net 442 ( 106 ) ( 53 )

Income from bank-owned life insurance 6,050 5,190 4,418

Mortgage banking income 15,892 31,391 3,819

Gain on sale of insurance business 25,327 — —

Other operating income 11,963 8,585 10,541

11 unchanged sentences

Real estate owned expense 298 359 478

Acquisition/branch optimization expense 20,789 4,168 1,014

Merger, asset disposition and restructuring expense 3,453 20,789 4,168

Other expenses 8,349 16,494 13,995

27 unchanged sentences

Net change in fair value of interest rate swaps — — —

Defined benefit plans:

Net loss, net of tax $ 4,169 , $ 3,193 , $ 770 , respectively

Defined benefit plan:

Net gain/(loss), net of tax $( 9,144 ), $ 4,169 , $ 3,193 , respectively

23,748 ( 11,301 ) ( 8,059 )

1 unchanged sentence

net of tax of $( 515 ), $( 395 ), and $( 334 ), respectively

Net loss on defined benefit plans ( 10,304 ) ( 7,224 ) ( 278 )

1,332 997 835

Net gain/(loss) on defined benefit plans 25,080 ( 10,304 ) ( 7,224 )

Other comprehensive income/(loss) ( 4,080 ) 3,392 2,755

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Balance at December 31, 2018 $ 1,034 745,926 550,374 ( 39,696 ) 1,257,638

Reclassification due to adoption of ASU No.

2018-02 — — 6,746 ( 6,746 ) —

Comprehensive income:

Net income — — 110,432 — 110,432

Other comprehensive loss, net of tax of $ 374

Other comprehensive income, net of tax of $( 1,129 )

— — — 2,755 2,755

Total comprehensive income — — 110,432 2,755 113,187

Acquisition of Union Community Bank 24 43,264 — — 43,288

Reclassification due to adoption of ASU No.

2016-02 — — ( 1,226 ) — ( 1,226 )

Exercise of stock options 9 9,718 — — 9,727

9 unchanged sentences

Total comprehensive income — — 74,854 3,392 78,246

Acquisition of United Community Bank 24 43,264 — — 43,288

Acquisition of Mutual Bank 206 213,200 — — 213,406

Reclassification due to adoption of ASU No.

1 unchanged sentence

Exercise of stock options 1 1,478 — — 1,479

Share repurchases ( 7 ) ( 9,269 ) — — ( 9,276 )

Stock-based compensation expense 3 4,236 — — 4,239

Stock-based compensation forfeited ( 2 ) 2 — — —

Other — 105 — — 105

Dividends paid ($ 0.76 per share)

6 unchanged sentences

Total comprehensive income — — 154,323 ( 4,080 ) 150,243

Acquisition of Mutual Bank 206 213,200 — — 213,406

Reclassification due to adoption of ASU No.

2016-13 — — ( 9,649 ) — ( 9,649 )

Exercise of stock options 12 13,999 — — 14,011

2 unchanged sentences

Stock-based compensation forfeited ( 1 ) 1 — — —

Other — 105 — — 105

Dividends paid ($ 0.79 per share)

12 unchanged sentences

Provision for credit losses ( 11,883 ) 83,975 22,659

Net (gain)/loss on sale of assets ( 3,249 ) ( 2,472 ) 1,677

Net gain on sale of assets ( 1,201 ) ( 3,249 ) ( 2,472 )

Mortgage banking activity ( 20,120 ) ( 25,798 ) —

Gain on sale of insurance business ( 25,327 ) — —

Net depreciation, amortization and accretion 6,633 4,738 3,824

Increase in other assets ( 16,097 ) ( 66,080 ) ( 6,428 )

Increase/(decrease) in other liabilities 47,018 53,998 ( 1,129 )

(Increase)/decrease in other assets 22,163 ( 16,097 ) ( 66,080 )

Increase in other liabilities 4,025 47,018 53,998

Net amortization on marketable securities 7,757 3,797 922

15 unchanged sentences

Proceeds from sale of loans held for investment — 50,791 97,923

Net proceeds/(redemptions) of FHLB stock 6,107 1,348 ( 3,902 )

Net proceeds of FHLB stock 7,564 6,107 1,348

Proceeds from sale of real estate owned 2,700 1,651 4,198

Sale of real estate owned for investment, net 607 608 607

Proceeds from sale of real estate owned for investment, net 305 607 608

Purchases of premises and equipment ( 17,517 ) ( 12,254 ) ( 10,899 )

Proceeds from sale of insurance business 28,238 — —

Acquisitions, net of cash received — 261,712 ( 28,779 )

Net cash provided used in investing activities ( 560,575 ) ( 300,593 ) ( 281,913 )

Net cash used in investing activities ( 232,970 ) ( 560,575 ) ( 300,593 )

NORTHWEST BANCSHARES, INC.

11 unchanged sentences

Proceeds from stock options exercised 14,011 1,479 9,727

Repurchase of Northwest stock ( 9,276 ) — —

Purchase of common stock for retirement ( 23,854 ) ( 9,276 ) —

Net cash provided by financing activities 570,494 1,095,571 165,188

25 unchanged sentences

(a) Nature of Operations

Northwest Bancshares, Inc., a Maryland corporation headquartered in Warren, Pennsylvania, is the federal savings and loan holding company for its wholly owned subsidiary, Northwest Bank.

Northwest Bancshares, Inc., a Maryland corporation headquartered in Columbus, Ohio, is the federal savings and loan holding company for its wholly owned subsidiary, Northwest Bank.

Northwest Bank, a Pennsylvania chartered savings bank, offers personal and business deposit and loan products as well as investment management and insurance services through its 170 banking locations in Pennsylvania, New York, Ohio, and Indiana.

12 unchanged sentences

We held no securities classified as trading at or during the years ended December 31, 2021 and 2020.

Fair values are determined as described in Note 17.

Throughout the year we validate the prices received from third parties by comparing them to prices provided by a different independent pricing service.

We have reviewed the detailed valuation methodologies provided to us by our pricing services.

On a quarterly basis, we measure expected credit losses on held-to-maturity debt securities on a collective basis by major security type and all of our held-to-maturity debt securities are residential mortgage-backed securities.

12 unchanged sentences

If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security.

If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than amortized cost.

Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is

NORTHWEST BANCSHARES, INC.

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(All dollar amounts presented in tables are in thousands, except as indicated)

recorded for the credit loss, limited by the amount that the fair value is less than amortized cost.

Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense.

Losses are charged against the allowance when we believe the uncollectibility of an available-for-sale security is confirmed or when there is an intent or requirement to sell the security.

Accrued interest receivable on available-for-sale debt securities totaled $ 1.9 million and $ 900,000 at December 31, 2020 and December 31, 2019, respectively, and is excluded from the estimate of credit losses.

Accrued interest receivable on available-for-sale debt securities totaled $ 1.9 million at December 31, 2021 and December 31, 2020, and is excluded from the estimate of credit losses.

A debt security is placed on nonaccrual status at the time any principal or interest payments become 90 days past due.

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Accrued interest receivable totaled $ 21.3 million and $ 31.7 million at December 31, 2021 and December 31, 2020, respectively, and was reported in accrued interest receivable on the Consolidated Statements of Financial Position.

Accrued interest receivable is excluded from the amortized cost basis of loans and from the estimate of allowance for credit losses, except for loans that received six-month deferrals as a result of COVID-19.

Accrued interest receivable on loans that received six-month deferrals was $ 4.4 million at December 31, 2020 .

Accrued interest receivable is excluded from the amortized cost basis of loans and from the estimate of allowance for credit losses.

Interest income on loans is credited to income as earned.

7 unchanged sentences

A modified loan is determined to be a TDR based on the contractual terms as specified by the original loan agreement or the most recent modification.

Once classified as a TDR, a loan is removed from such classification under three circumstances:

(1) the loan is paid off, (2) the loan is charged off, or (3) if, at the beginning of the

Once classified as a TDR, a loan is removed from

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

current fiscal year, the loan has performed in accordance with the modified terms for a minimum of six consecutive months and at the time of modification the loan’s interest rate represented a then current market interest rate for a loan of similar risk.

such classification under three circumstances:

(1) the loan is paid off, (2) the loan is charged off, or (3) if, at the beginning of the current fiscal year, the loan has performed in accordance with the modified terms for a minimum of six consecutive months and at the time of modification the loan’s interest rate represented a then current market interest rate for a loan of similar risk.

Loan delinquency is measured based on the number of days since the payment due date.

6 unchanged sentences

At December 31, 2021 and 2020, there were $ 25.1 million and $ 58.8 million of residential mortgage loans classified as held-for-sale, respectively.

Acquired loans that are not considered p urchased with credit deterioration (" PCD") are initially measured at fair value with no carryover of the related allowance for credit losses.

Acquired loans that are not considered purchased with credit deterioration (“PCD”) are initially measured at fair value with no carryover of the related allowance for credit losses.

Determining the fair value of the loans involves estimating the amount and timing of principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest.

7 unchanged sentences

Subsequent changes to the allowance for credit losses are recorded through provision expense.

Upon adoption of ASC 326, we assessed our legacy loans that were previously accounted for under ASC 310-30 to determine whether they share similar risk characteristics and whether some or all of the assets should be assessed collectively with other loans that share similar risk characteristics.

Upon adoption, an allowance for credit losses was determined for each loan and added to the loan's carrying amount to establish a new amortized cost basis.

The difference between the unpaid principal balance of the loan and the new amortized cost is the noncredit premium or discount which will be amortized into interest income over the remaining life of the loan.

Changes to the allowance for credit losses after adoption are recorded through provision expense.

(f) Allowance for Credit Losses and Provision for Credit Losses

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In determining the estimated life of a credit card receivable, we first estimate the future cash flows expected to be received and then apply those expected future cash flows to the credit card balance.

Expected credit losses for credit cards are determined by estimating the amount and timing of principal payments expected to be

Expected credit losses for credit cards are determined by estimating the amount and timing of principal payments expected to be received as payment for the balance outstanding as of the reporting date and applying those principal payments against the balance outstanding as of the reporting period until the expected payments have been fully allocated.

The allowance for credit losses is recorded for the excess of the balance outstanding as of the reporting period over the expected principal payments.

The allowance for credit losses is measured on a collective (“pool”) basis when similar risk characteristics exist.

For the purpose of calculating portfolio-level reserves, we have grouped our loans into seven segments:

residential mortgage loans, home

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

received as payment for the balance outstanding as of the reporting date and applying those principal payments against the balance outstanding as of the reporting period until the expected payments have been fully allocated.

The allowance for credit losses is recorded for the excess of the balance outstanding as of the reporting period over the expected principal payments.

The allowance for credit losses is measured on a collective ("pool") basis when similar risk characteristics exist.

For the purpose of calculating portfolio-level reserves, we have grouped our loans into seven segments:

residential mortgage loans, home equity loans, vehicle loans, consumer loans, commercial real estate loans, commercial real estate owner-occupied and commercial loans.

equity loans, vehicle loans, consumer loans, commercial real estate loans, commercial real estate owner-occupied and commercial loans.

The allowance for credit losses is measured at the pool level utilizing loan-level inputs wherever possible.

We use a twelve-month forecasting period and revert to historical average loss rates thereafter.

We use a twenty-four month forecasting period and revert to historical average loss rates thereafter.

The reasonable and supportable forecast is based on a probability-weighted multiple economic scenario approach and obtained from a third party vendor.

4 unchanged sentences

As part of the analysis as of December 31, 2021, we considered the most recent economic conditions and forecasts available which incorporated the impact of COVID-19.

The ACL increased in the period largely attributable to COVID-19.

Mortgage and Home Equity Loans

22 unchanged sentences

This model uses borrower information and macroeconomic forecasts as key inputs.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

Commercial Real Estate Loans

3 unchanged sentences

The model accepts as inputs key risk drivers such as:

current balance, original loan-to-value-ratio, type of collateral, location of collateral, delinquency status, loan age, obligor financial statement information, and expected prepayment rates, among other characteristics.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

characteristics.

It also utilizes macroeconomic forecasts of commercial real estate price indices, unemployment rates, gross domestic product and others.

22 unchanged sentences

We estimate the liability balance using relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts.

The estimate includes a consideration of the likelihood that

The estimate includes a consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.

Off-balance-sheet exposures that are not unconditionally cancellable have been identified for the mortgage, home equity, commercial real estate, and commercial loan portfolios.

Results for reporting periods beginning after January 1, 2020 are presented under CECL methodology while prior period amounts continue to be reported in accordance with Accounting Standards Codification (“ASC”) Topic 450, Contingencies;

and specific reserves based upon ASC Topic 310, Receivables.

ASC Topic 450 applies to homogeneous loan pools such as commercial loans, consumer lines of credit and residential mortgages that are not individually evaluated for impairment.

ASC Topic 310 is applied to commercial and consumer loans that are individually evaluated for impairment.

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.

Off-balance-sheet exposures that are not unconditionally cancellable have been identified for the home equity, commercial real estate, and commercial loan portfolios.

and specific reserves based upon ASC Topic 310, Receivables.

ASC Topic 450 applies to homogeneous loan pools such as commercial loans, consumer lines of credit and residential mortgages that are not individually evaluated for impairment.

ASC Topic 310 is applied to commercial and consumer loans that are individually evaluated for impairment.

(g) Real Estate Owned

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Determining the fair value of a reporting unit requires a high degree of subjective judgment, including developing cash flow projections, selecting appropriate discount rates, identifying relevant market comparables, incorporating general economic and market conditions and selecting an appropriate control premium.

Quarterly, the Company evaluates whether there are any triggering events that would require an update to our previous goodwill assessment.

During the first quarter of 2020, the Company determined the COVID-19 pandemic and its negative effect on the global economy to be a triggering event.

As a result, the Company, with the assistance of a third-party specialist, performed a quantitative impairment analysis in accordance with ASU 2017-04 as of March 31, 2020.

This analysis indicated the aggregate fair value of Northwest Bank, the sole reporting unit of Northwest Bancshares, Inc., exceeded the carrying value and therefore goodwill

We have established June 30 of each year as the date for conducting our annual goodwill impairment assessment.

Quarterly, we evaluate if there are any triggering events that would require an update to our previous assessment.

We conducted our annual impairment assessment as of June 30, 2021 by first performing a qualitative assessment of goodwill to determine if it was more likely than not that the fair value was less than the carrying value.

In performing a qualitative analysis, factors considered include, but are not limited to, macroeconomic conditions, industry and market conditions and overall financial performance.

The results of the qualitative assessment for 2021 indicated that it was not more likely than not that the fair value of the reporting unit was less than the carrying value.

Consequently, no additional quantitative two-step impairment test was required and no impairment was recorded in 2021.

Future events could cause us to conclude that goodwill has become impaired, which would result in recording an impairment loss.

There were no changes in our operations that would cause us to update the assessment performed as of June 30, 2021 and 2020.

Accordingly, we have determined that goodwill is not impaired as of December 31, 2021 and 2020.

(k) Core Deposit and Other Identifiable Intangibles

Through the assistance of an independent third party, we analyze and prepare a core deposit study for all bank acquisitions or other identifiable intangible asset study, such as customer lists, for all non-bank acquisitions.

The core deposit study reflects the cumulative present value benefit of acquiring deposits versus an alternative source of funding.

The other identifiable intangible asset

NORTHWEST BANCSHARES, INC.

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(All dollar amounts presented in tables are in thousands, except as indicated)

was not impaired.

Given the results of the quantitative goodwill analysis performed during the first quarter and the absence of any significant changes in the economic environment that would indicate a change in the conclusion of the quantitative analysis performed, the Company elected to perform a qualitative goodwill impairment test as of June 30, 2020 in accordance with ASC 350, as updated by ASU 2017-04, and concluded that goodwill was not impaired as of June 30, 2020.

As of December 31, 2020, there were no events or changes in circumstances that would cause us to update that goodwill impairment test and we have concluded goodwill is not impaired as of December 31, 2020 and 2019.

(k) Core Deposit and Other Identifiable Intangibles

The core deposit study reflects the cumulative present value benefit of acquiring deposits versus an alternative source of funding.

The other identifiable intangible asset study reflects the cumulative present value benefit of acquiring the income stream from an existing customer base versus developing new business relationships.

study reflects the cumulative present value benefit of acquiring the income stream from an existing customer base versus developing new business relationships.

Based upon analysis, the amount of the premium related to the core deposits or other identifiable intangibles of the business purchased is calculated along with the estimated life of the intangible.

1 unchanged sentence

(l) Bank-Owned Life Insurance

We own insurance on the lives of a certain group of current and former employees and director's.

We own insurance on the lives of a certain group of current and former employees and directors.

The policies were purchased to help offset the increase in the costs of various benefit plans, including healthcare, as well as the directors deferred compensation plan.

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(o) Pension Plans

We maintain multiple noncontributory defined benefit pension plans for substantially all of our employees.

We maintain multiple noncontributory defined benefit pension plans (“Pension Plan”) for substantially all of our employees.

The net periodic pension cost has been calculated using service cost, interest cost, expected returns on plan assets and net amortization.

The other components of the net periodic benefit cost are included in other expense on the Consolidated Statement of Income and are reported separately from the service costs.

Pension expense and obligations depend on assumptions used in calculating such amounts.

These assumptions include discount rates, anticipated salary increases, interest costs, expected return on plan assets, mortality rates, and other factors.

In determining the projected benefit obligations for pension benefits at December 31, 2021 and 2020, we u sed a discount rate of 2.75 % and 2.39 %, respectively.

We use the FTSE (previously Citigroup) Pension Liability Index rates matching the duration of our benefit payments as of the measurement date, December 31, to determine the discount rate.

(p) Income Taxes

4 unchanged sentences

We account for income taxes under the asset and liability method.

The objective of the asset and liability method is to establish deferred tax assets and liabilities for temporary differences between the financial reporting and tax basis of our assets and

The objective of the asset and liability method is to establish deferred tax assets and liabilities for temporary differences between the financial reporting and tax basis of our assets and liabilities based on the tax rates expected to be in effect when such amounts are realized or settled.

The effect on deferred tax assets and liabilities with regard to a change in tax rates is recognized in the tax provision in the period the change is enacted.

If current available information raises doubt as to the realization of the deferred tax assets, a valuation allowance is established.

NORTHWEST BANCSHARES, INC.

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(All dollar amounts presented in tables are in thousands, except as indicated)

liabilities based on the tax rates expected to be in effect when such amounts are realized or settled.

The effect on deferred tax assets and liabilities with regard to a change in tax rates is recognized in the tax provision in the period the change is enacted.

(q) Stock-Related Compensation

9 unchanged sentences

(3) risk-free discount rates ranging from 0.7 % to 2.9 %;

and (4) expected lives of seven to ten years based on previous grants.

and (4) expected lives of nine to ten years based on previous grants.

During the year ended December 31, 2021, we awarded 621,972 stock options to employees and 72,000 stock options to directors.

During the year ended December 31, 2020, we awarded 556,476 stock options to employees and 57,600 stock options to directors.

The options granted in 2020 and 2019 vest over a seven-year period, with the first vesting occurring on the grant date.

The options granted in 2021 and 2020 vest over a five or seven-year period, depending on the date of the grant, with the first vesting occurring on the grant date.

New shares are issued when options are exercised.

2 unchanged sentences

During the year ended December 31, 2020, we awarded 261,091 restricted shares to employees and 21,600 restricted shares to directors.

These common share awards vest over a seven-year period, with the first vesting occurring on the grant date.

These common share awards vest over a five or seven-year period, depending on the date of the grant, with the first vesting occurring on the grant date.

Once shares have vested, they are no longer restricted.

16 unchanged sentences

For derivatives that are not designated as hedging instruments, any gain or loss is recognized immediately in earnings.

(s) Off-Balance-Sheet Instruments

In the normal course of business, we extend credit in the form of loan commitments, undisbursed lines of credit, and standby letters of credit.

These off-balance-sheet instruments involve, to various degrees, elements of credit and interest rate risk not reported in the Consolidated Statement of Financial Condition.

We utilize the same underwriting standards for these instruments as other extensions of credit.

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

(s) Off-Balance-Sheet Instruments

In the normal course of business, we extend credit in the form of loan commitments, undisbursed lines of credit, and standby letters of credit.

These off-balance-sheet instruments involve, to various degrees, elements of credit and interest rate risk not reported in the Consolidated Statement of Financial Condition.

We utilize the same underwriting standards for these instruments as other extensions of credit.

(t) Use of Estimates

7 unchanged sentences

(2) Recently Adopted Accounting Standards

On January 1, 2020, the Company adopted Accounting Standards Update ("ASU") 2016-13, " Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments , which eliminated the probable initial recognition threshold for credit losses and instead requires that all financial assets (or group of financial assets) measured at amortized cost be presented at the net amount expected to be collected inclusive of the entity’s current estimate of all lifetime expected credit losses.

This guidance also applies to certain off-balance-sheet credit exposures such as unfunded commitments and non-derivative financial guarantees.

In addition, ASC 326 made changes to the accounting for available-for-sale debt securities.

ASC 326 requires credit losses to be presented as an allowance, rather than a write-down, on available-for-sale debt securities management does not intend to sell or believes that it is more likely than not they will be required to sell.

We adopted ASC 326 using the modified retrospective transition approach for all financial assets measured at amortized cost and off-balance-sheet credit exposures.

As a result, the Company was not required to adjust its comparative period financial information for effects of the standard or make the new required ASC 326 disclosures for periods before the date of adoption (i.e., January 1, 2020).

As a result of the adoption of ASU 2016-13, or CECL, we recognized an increase to the allowance for credit losses of $ 10.8 million, an increase to our reserve for off-balance sheet exposures of $ 2.3 million, an increase in deferred tax assets of $ 2.9 million and a cumulative-effect adjustment to retained earnings of $ 9.6 million, net of taxes, on the Consolidated Statements of Financial Condition as of January 1, 2020, with no impact on our Consolidated Statement of Income or Consolidated Statement of Cash Flows.

Additionally, the adoption of CECL did not materially impact our held-to-maturity or our available-for-sale securities portfolio, which are primarily comprised of agency-backed mortgage securities.

We also adopted ASC 326 using the prospective transition approach for financial assets PCD that were previously classified as purchased credit impaired (PCI) and accounted for under ASC 310-30.

In accordance with ASC 326, we did not reassess whether PCI assets met the criteria for PCD assets as of the date of adoption.

On January 1, 2020, the amortized cost basis of the PCD assets were adjusted to reflect the addition of $ 517,000 of allowance for credit losses.

The remaining noncredit discount (based on the adjusted amortized cost basis) will be accreted into interest income at the effective interest rate as of January 1, 2020.

We have elected to phase the estimated impact of CECL into regulatory capital in accordance with the interim final rule of the Board of Governors of the Federal Reserve System (FRB) and other U.S.

banking agencies that became effective on March 31, 2020.

As a result, we will delay recognizing the estimated impact of CECL on regulatory capital until after a two-year deferral period, which for us extends through December 31, 2021.

Beginning on January 1, 2022, we will be required to phase in 25 % of the previously deferred estimated capital impact of CECL, with an additional 25 % to be phased in at the beginning of each subsequent year until fully phased in by the first quarter of 2025.

Under the interim final rule, the estimated impact of CECL on regulatory capital that we will defer and later phase in is calculated as the entire day-one impact at adoption plus 25 % of the subsequent change in allowance during the two-year deferral period.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This guidance removes, modifies and adds disclosure requirements for fair value measurements.

On January 1, 2020, the Company adopted ASU 2018-13 on a prospective basis for the new and modified disclosures, and on a retrospective basis for disclosures that have been eliminated.

The adoption of this standard did not have any effect on our results of operations or financial position.

Refer to Note 17, "Disclosures About Fair Value of Financial Instruments".

In August 2018, the FASB issued ASU 2018-15, “ Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” This guidance aligns the requirements for capitalization of implementation costs incurred in a hosting arrangement that is a service contract with the existing guidance for internal-use software.

On January 1, 2020, the Company adopted ASU 2018-15 on a prospective basis which will be applied to relevant implementation costs incurred after the date of adoption.

The adoption of this standard is not expected to have a material prospective impact on our financial statements.

(3) Acquisition

On April 24, 2020, the Company completed the merger with MutualFirst Financial, Inc., the holding company for MutualBank (collectively referred to as "MutualBank"), for total consideration of $ 213.4 million.

The transaction has expanded Northwest’s franchise by 36 offices in Indiana.

The result of MutualBank's operations are included in the Consolidated Statements of Income from the date of acquisition.

Under the terms of the merger agreement, each share of MutualBank's common stock was converted into 2.4 shares of the Company's common stock, or a total of 20,658,957 shares of common stock of the Company, valued at $ 213.4 million, based on the $ 10.33 per share closing price of the Company's stock on April 24, 2020 with cash in lieu of fractional shares paid at a rate of $ 10.71 per whole share of Northwest Bancshares, Inc.

common stock.

The following table shows the assets acquired and the liabilities assumed that were recorded at fair value on the date of acquisition:

Consideration paid:

Northwest Bancshares, Inc.

common stock issued $ 213,406

Total consideration paid 213,406

Recognized amounts of identifiable assets acquired and (liabilities assumed), at fair value (1)

Cash and cash equivalents $ 261,712

Investment securities available-for-sale 126,854

Loans, net 1,508,141

FHLB stock 13,115

Premises and equipment 19,094

Core deposit intangible 3,717

Other assets 121,790

Deposits ( 1,617,039 )

Borrowings ( 232,200 )

Junior subordinated debentures ( 6,804 )

Other liabilities ( 21,150 )

Total identifiable net assets $ 177,230

Goodwill $ 36,176

(1) Amounts are estimates and subject to adjustment.

Actual amounts are not expected to differ materially from the amounts shown.

We estimated the fair value of loans acquired from MutualBank by utilizing a methodology wherein similar loans were aggregated into pools.

Cash flows for each pool were determined by estimating future credit losses and the rate of prepayments.

Projected monthly cash flows were then discounted to present value based on a market rate for similar loans.

There was no carryover of MutualBank’s allowance for credit losses associated with the loans we acquired as the loans were initially recorded at fair value.

The fair value of loans acquired was $ 1.508 billion, net of a $ 14.7 million discount.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

The core deposit intangible asset recognized as part of the MutualBank merger is being amortized over its estimated useful life of seven years utilizing an accelerated method.

The goodwill, which is not amortized for book purposes, was assigned to our Community Banking segment and is not deductible for tax purposes.

The fair values of savings and transaction deposit accounts acquired from MutualBank were assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand.

Certificates of deposit were valued by projecting out the expected cash flows based on the contractual terms of the certificates of deposit.

These cash flows were discounted based on a market rate for a certificate of deposit with a corresponding maturity.

Direct costs related to the MutualBank merger were expensed as incurred and were $ 12.1 million during the year ended December 31, 2020, which included technology and communications costs, professional services, marketing and advertising, and other noninterest expenses.

In August 2018, the FASB issued ASU 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20) - Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans”.

This guidance removes and adds disclosure requirements for defined benefit pension or other post-retirement plans.

On January 1, 2021, the Company adopted ASU 2018-14 on a retrospective basis for disclosures impacted.

The adoption of this standard did not have a material effect on our results of operations or financial position.

Refer to Note 15, “Employee Benefit Plans ” .

In December 2019, the FASB issued ASU 2019-12, “Income Taxes - Simplifying the Accounting for Income Taxes”.

This guidance simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition for deferred tax liabilities for outside basis differences.

ASU 2019-12 also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

On January 1, 2021, the Company adopted ASU 2019-12 on a prospective basis.

The adoption of the standard did not have a material effect on our results of operations or financial position.

At inception, the Company determines if an arrangement contains a lease and whether that lease meets the classification of a finance or operating lease.

7 unchanged sentences

For all leases, the Company elected the option of not separating lease and non-lease components and instead we account for them as a single lease component.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

Certain lease agreements include rental payments that are adjusted periodically for an index or rate.

15 unchanged sentences

Operating lease liabilities (other liabilities) 57,726 52,206

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

Other information related to leases as were as follows:

Other information related to leases were as follows:

For the years ended December 31,

5 unchanged sentences

Weighted average discount rate 3.1 % 3.4 %

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

Amounts disclosed for ROU assets obtained in exchange for lease obligations include amounts added to the carrying amount of ROU assets resulting from lease modifications and reassessments.

5 unchanged sentences

Total present value of lease payments $ 57,726

As of December 31, 2019

Thereafter 44,758

Total lease payments 69,996

Less amount of lease payments representing interest 17,904

Total present value of lease payments $ 52,092

Rental expense for the years ended December 31, 2021, 2020 and 2019 was $ 6.5 million, $ 6.8 million and $ 6.2 million, respectively.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

(4) Marketable Securities

5 unchanged sentences

government and agencies:

Due in one year through five years $ 20,000 — ( 68 ) 19,932

Due after ten years 57,681 — ( 1,722 ) 55,959

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Total marketable securities available-for-sale $ 1,565,002 8,845 ( 25,255 ) 1,548,592

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

Marketable securities held-to-maturity at December 31, 2021 are as follows:

4 unchanged sentences

government and agencies:

Due in one year through five years $ 16,478 — ( 206 ) 16,272

Due in five years through ten years 107,973 — ( 4,613 ) 103,360

6 unchanged sentences

Total marketable securities held-to-maturity $ 768,154 350 ( 16,991 ) 751,513

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

Marketable securities available-for-sale at December 31, 2020 are as follows:

4 unchanged sentences

government and agencies:

Due in less than one year $ 14,951 40 — 14,991

Due after ten year $ 40,761 211 ( 55 ) 40,917

Debt issued by government-sponsored enterprises:

1 unchanged sentence

Due in one year through five years 238 3 — 241

Due after ten years 3,716 53 ( 109 ) 3,660

Due in five years through ten years 68,973 238 ( 80 ) 69,131

Municipal securities:

3 unchanged sentences

Due after ten years 89,778 3,752 ( 72 ) 93,458

Corporate debt issues:

Due in five years through ten years 919 — — 919

Residential mortgage-backed securities:

5 unchanged sentences

Total marketable securities available-for-sale $ 1,375,685 24,702 ( 1,446 ) 1,398,941

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

Marketable securities held-to-maturity at December 31, 2020 are as follows:

2 unchanged sentences

holding losses Fair value

Debt issued by the U.S.

government and agencies:

Due after five years through ten years $ 67,990 12 ( 123 ) 67,879

Residential mortgage-backed securities:

5 unchanged sentences

Total marketable securities held-to-maturity $ 178,887 904 ( 125 ) 179,666

The following table presents information regarding the issuers and the carrying values of our mortgage-backed securities at December 31, 2020 and 2019:

The following table shows the contractual maturity of our residential mortgage-backed securities available-for-sale at December 31, 2021:

Amortized cost Fair value

Residential mortgage-backed securities:

FNMA $ 532,532 280,832

GNMA 367,354 231,491

FHLMC 357,249 178,375

Other (including non-agency) 466 497

Due in less than one year $ 490 491

Due in one year through five years 14,013 14,126

Due after five years through ten years 89,594 89,948

Due after ten years 1,210,188 1,193,350

Total residential mortgage-backed securities $ 1,314,285 1,297,915

4 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table shows the contractual maturity of our residential mortgage-backed securities held-to-maturity at December 31, 2021:

Amortized cost Fair value

Residential mortgage-backed securities:

Due in one year through five years $ 792 833

Due after five years through ten years 40,494 38,817

Due after ten years 602,417 592,231

Total residential mortgage-backed securities $ 643,703 631,881

The following table presents information regarding the issuers and the carrying values of our mortgage-backed securities at December 31, 2021 and 2020:

Residential mortgage-backed securities:

FNMA $ 704,070 532,532

GNMA 577,684 367,354

FHLMC 659,433 357,249

Other (including non-agency) 431 466

Total residential mortgage-backed securities $ 1,941,618 1,257,601

Marketable securities having a carrying value of $ 227.5 million at December 31, 2021 were pledged under collateral agreements.

During the year ended December 31, 2021, we sold marketable securities classified as available-for-sale for $ 59.6 million, with gross realized gains of $ 410,000 and gross realized losses of $ 396,000 .

During the year ended December 31, 2020, we sold marketable securities classified as available-for-sale for $ 1.1 million, with gross realized gains of $ 64,000 and no gross realized losses.

During the year ended December 31, 2019, we sold marketable securities classified as available-for-sale for $ 32.4 million, with gross realized gains of $ 29,000 and no gross realized losses.

During the year ended December 31, 2018, we sold marketable securities classified as available-for-sale for $ 5.2 million, with gross realized gains of $ 189,000 and gross realized losses of $ 37,000 .

During the years ended December 31, 2020, we did no t recognize allowance for credit losses and during the years ended December 31, 2019 and 2018, we did no t recognize non-cash credit related other-than-temporary-impairment in our investment portfolio.

During the years ended December 31, 2021 and 2020, we did no t recognize allowance for credit losses in our investment portfolio and during the year ended December 31, 2019, we did no t recognize non-cash credit related other-than-temporary-impairment in our investment portfolio.

The following table shows the fair value and gross unrealized losses on investment securities, for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2021:

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Total temporarily impaired securities $ 1,586,482 ( 30,356 ) 290,549 ( 11,890 ) 1,877,031 ( 42,246 )

The following table shows the fair value and gross unrealized losses on investment securities, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2019:

Less than 12 months 12 months or more Total

3 unchanged sentences

government sponsored enterprises $ 67,809 ( 179 ) 1,923 ( 80 ) 69,732 ( 259 )

Municipal securities 4,257 ( 79 ) — — 4,257 ( 79 )

Residential mortgage-backed securities 300,767 ( 1,202 ) 5,533 ( 31 ) 306,300 ( 1,233 )

Total temporarily impaired securities $ 372,833 ( 1,460 ) 7,456 ( 111 ) 380,289 ( 1,571 )

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

The Company does not believe that the available-for-sale debt securities that were in an unrealized loss position as of December 31, 2021, which were comprised of 245 individual securities, represents a credit loss impairment.

19 unchanged sentences

Total marketable securities held-to-maturity $ 768,154 768,154

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

For the year-ended December 31, 2019, we performed an assessment to determine whether there were any events or economic circumstances that indicated a security which had an unrealized loss was impaired other-than-temporarily.

The assessment considered many factors including the severity and duration of the impairment;

recent events specific to the issuer or industry;

and for debt securities, external credit ratings, underlying collateral position and recent downgrades.

For asset backed securities, we evaluated current characteristics of each security such as delinquency and foreclosure levels, credit enhancements and projected losses and coverage.

It is possible that the underlying collateral of these securities will perform worse than current expectations, which may lead to adverse changes in cash flows on these securities and potential future losses.

Events that may trigger material declines in fair values for these securities in the future would be, but are not limited to:

deterioration of credit metrics, significantly higher levels of default and severity of loss on the underlying collateral, deteriorating credit enhancement and loss coverage ratios, or further illiquidity.

For debt securities, credit related other-than-temporary impairment is recognized in earnings, while noncredit related other-than-temporary impairment on securities not expected to be sold, or otherwise disposed of, is recognized in other comprehensive income.

We assert that we do not have the intent to sell these securities and it is more likely than not that we will not have to sell these securities before a recovery of our cost basis.

For these reasons, we consider the unrealized losses to be temporary impairment losses.

There are approximately 119 positions that are temporarily impaired at December 31, 2019.

The aggregate carrying amount of cost-method investments, including both held-to-maturity and available-for-sale, at December 31, 2019 was $ 837.9 million, of which all were evaluated for impairment.

As of December 31, 2019, there were no investment securities for which other-than-temporary impairment charges were recorded in earnings.

For the year ended December 31, 2019, there were no credit related impa irment losses recognized in earnings for debt securities held and not intended to be sold.

(5) Loans Receivable

On January 1, 2020, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments ” using the modified retrospective transition approach.

The following table shows a summary of our loans receivable at amortized cost basis at December 31, 2021 and December 31, 2020 (in thousands):

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(2) Includes $ 62.8 million and $ 40.9 million of net unearned income, unamortized premiums and discounts and deferred fees and costs at December 31, 2021 and December 31, 2020, respectively.

As of December 31, 2020, 2019, and 2018, we serviced loans for others approximating $ 1.516 billion, $ 793.1 million, and $ 794.2 million, respectively.

These loans serviced for others are not our assets and are not included in our financial statements.

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

As of December 31, 2021, 2020, and 2019, we serviced loans for others approximating $ 1.622 billion, $ 1.516 billion, and $ 793.1 million, respectively.

These loans serviced for others are not our assets and are not included in our financial statements.

As of December 31, 2021 and 2020, approximately 41 % and 42 %, respectively, of our loan portfolio was secured by properties located in Pennsylvania.

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Loans receivable as of December 31, 2021 and 2020 include $ 3.277 billion and $ 3.690 billion, respectively, of adjustable rate loans and $ 6.739 billion and $ 6.840 billion, respectively, of fixed rate loans.

The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the year ended December 31, 2020 and includes the cumulative effect of adopting ASU 2016-13 (in thousands):

The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the year ended December 31, 2021 (in thousands):

Balance as of December 31, 2021 Current

period provision Charge-offs Recoveries Initial ACL

on loans purchased with credit deterioration Cumulative effect of ASU 2016-13* Balance as of December 31, 2019

period provision Charge-offs Recoveries Balance as of December 31, 2020

Allowance for Credit Losses

1 unchanged sentence

Residential mortgage loans $ 7,373 2,844 ( 3,672 ) 935 7,266

$ 7,266 ( 3,289 ) ( 917 ) 362 1,095 7,441 2,574

Home equity loans 5,300 1,788 ( 3,380 ) 900 5,992

5,992 ( 3,357 ) ( 608 ) 766 216 5,786 3,189

Vehicle loans 15,483 2,754 ( 4,632 ) 2,536 14,825

14,825 11,416 ( 6,827 ) 1,867 235 842 7,292

Consumer loans 2,884 3,070 ( 5,417 ) 2,360 2,871

2,871 4,126 ( 5,831 ) 1,542 157 ( 2,424 ) 5,301

Total Personal Banking 31,040 10,456 ( 17,101 ) 6,731 30,954

1 unchanged sentence

Commercial real estate loans 54,141 ( 15,496 ) ( 11,933 ) 2,189 79,381

79,381 58,483 ( 4,240 ) 1,287 5,720 2,288 15,843

Commercial real estate loans - owner occupied 3,883 ( 5,852 ) ( 890 ) 107 10,518

10,518 2,588 ( 83 ) 27 963 1,278 5,745

Commercial loans 13,177 ( 991 ) ( 4,213 ) 4,807 13,574

13,574 14,008 ( 16,212 ) 1,741 459 ( 4,419 ) 17,997

Total Commercial Banking 71,201 ( 22,339 ) ( 17,036 ) 7,103 103,473

5 unchanged sentences

Home equity loans 39 4 — — 35

Consumer loans — — — — — ( 402 ) 402

Total Personal Banking 41 4 — — 37

2 unchanged sentences

Commercial real estate loans - owner occupied 142 ( 184 ) — — 326

326 235 — — — 88 3

Commercial loans 1,394 ( 1,157 ) — — 2,551

1 unchanged sentence

Total off-balance-sheet exposure $ 2,458 ( 3,905 ) — — 6,363

* Includes the impact of the initial allowance on PCD loans of $ 517,000 .

During the year ended December 31, 2020, we sold $ 50.0 million of loans that were classified as held-for-investment, for a gain of $ 1.3 million, which is reported in gain on sale of loans on the Consolidated Statements of Income.

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the year ended December 31, 2019, prior to the adoption of ASU 2016-13 (in thousands):

Balance as of December 31, 2020 Current

period provision Charge-offs Recoveries Balance as of December 31, 2018

Originated loans

period provision Charge-offs Recoveries Initial ACL

on loans purchased with credit deterioration Cumulative effect of ASU 2016-13* Balance as of December 31, 2019

Allowance for Credit Losses

Personal Banking:

1 unchanged sentence

Home equity loans 5,992 ( 3,357 ) ( 608 ) 766 216 5,786 3,189

Vehicle loans 14,825 11,416 ( 6,827 ) 1,867 235 842 7,292

Consumer loans 2,871 4,126 ( 5,831 ) 1,542 157 ( 2,424 ) 5,301

2 unchanged sentences

Commercial real estate loans 79,381 58,483 ( 4,240 ) 1,287 5,720 2,288 15,843

Commercial real estate loans - owner occupied 10,518 2,588 ( 83 ) 27 963 1,278 5,745

Commercial loans 13,574 14,008 ( 16,212 ) 1,741 459 ( 4,419 ) 17,997

Total Commercial Banking 103,473 75,079 ( 20,535 ) 3,055 7,142 ( 853 ) 39,585

Total originated loans 51,439 16,190 ( 21,406 ) 4,904 51,751

Acquired loans

Total $ 134,427 83,975 ( 34,718 ) 7,592 8,845 10,792 57,941

Allowance for Credit Losses -

off-balance-sheet exposure

Personal Banking:

5 unchanged sentences

Commercial real estate loans 3,449 1,438 — — — 1,934 77

Commercial real estate loans - owner occupied 326 235 — — — 88 3

Commercial loans 2,551 1,459 — — — 923 169

Total Commercial Banking 6,326 3,132 — — — 2,945 249

Total acquired loans 6,502 6,469 ( 4,806 ) 1,376 3,463

Total $ 57,941 22,659 ( 26,212 ) 6,280 55,214

Total off-balance-sheet exposure $ 6,363 3,139 — — — 2,250 974

* Includes the impact of the initial allowance on PCD loans of $ 517,000 .

NORTHWEST BANCSHARES, INC.

9 unchanged sentences

Residential mortgage loans $ 2,463 ( 1,089 ) ( 935 ) 433 4,054

$ 4,054 808 ( 1,067 ) 489 3,824

Home equity loans 2,830 46 ( 619 ) 219 3,184

3,184 ( 25 ) ( 1,183 ) 320 4,072

Consumer loans 12,055 10,025 ( 11,537 ) 2,487 11,080

11,080 10,869 ( 15,674 ) 3,442 12,443

Total Personal Banking 17,348 8,982 ( 13,091 ) 3,139 18,318

1 unchanged sentence

Commercial real estate loans 17,292 ( 5,241 ) ( 5,078 ) 1,232 26,379

26,379 11,349 ( 6,096 ) 1,215 19,911

Commercial loans 16,799 12,449 ( 3,237 ) 533 7,054

7,054 ( 2,062 ) ( 2,675 ) 1,469 10,322

Total Commercial Banking 34,091 7,208 ( 8,315 ) 1,765 33,433

25 unchanged sentences

Residential mortgage loans $ 2,994,620 7,373 10,402 — 6,749 1,442 —

$ 3,068,121 7,266 15,924 — 8,431 560 —

Home equity loans 1,319,931 5,300 5,758 — 1,781 718 —

1,467,736 5,992 9,123 — 2,058 381 26

Vehicle loans 1,484,231 15,483 3,263 — — — —

1,152,673 14,825 5,533 1 — — —

Consumer loans 354,517 2,884 675 331 — — —

355,320 2,871 1,031 584 1 — —

Total Personal Banking 6,153,299 31,040 20,098 331 8,530 2,160 —

1 unchanged sentence

Commercial real estate loans 2,625,481 54,141 129,666 — 17,025 2,024 400

2,847,981 79,381 44,092 — 18,430 787 471

Commercial real estate loans - owner occupied 390,003 3,883 1,233 — 159 24 —

497,908 10,518 3,642 — 761 123 —

Commercial loans 847,609 13,177 7,474 — 4,574 609 60

1,191,110 13,574 23,487 — 2,454 165 362

Total Commercial Banking 3,863,093 71,201 138,373 — 21,758 2,657 460

1 unchanged sentence

(1) Includes $ 17.2 million of nonaccrual TDRs.

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at December 31, 2019, prior to the adoption of ASU 2016-13 (in thousands):

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at December 31, 2020 (in thousands):

receivable Allowance for

5 unchanged sentences

Residential mortgage loans $ 3,068,121 7,266 15,924 — 8,431 560 —

$ 2,868,127 2,574 14,476 — 7,550 560 —

Home equity loans 1,467,736 5,992 9,123 — 2,058 381 26

1,342,918 3,189 6,745 32 1,973 393 26

Vehicle loans 1,152,673 14,825 5,533 1 — — —

Consumer loans 355,320 2,871 1,031 584 1 — —

1,125,132 12,593 4,226 — — — —

Total Personal Banking 6,043,850 30,954 31,611 585 10,490 941 26

1 unchanged sentence

Commercial real estate loans 2,847,981 79,381 44,092 — 18,430 787 471

2,754,390 21,588 34,864 — 19,358 1,384 476

Commercial real estate loans - owner occupied 497,908 10,518 3,642 — 761 123 —

Commercial loans 1,191,110 13,574 23,487 — 2,454 165 362

718,107 17,997 8,559 — 3,118 665 64

Total Commercial Banking 4,536,999 103,473 71,221 — 21,645 1,075 833

6 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

Following the adoption of CECL as of January 1, 2020, the definitions of impairment and related impaired loan disclosures were removed.

Under CECL, we present the amortized cost of our loans on nonaccrual status including such loans with no allowance.

The following table presents the amortized cost of our loans on nonaccrual status as of the beginning and end of the year ended December 31, 2021 (in thousands):

January 1, 2020 Nonaccrual loans at December 31, 2020

with an allowance

no allowance Loans 90 days

January 1, 2021 December 31, 2021

Nonaccrual loans

with an allowance Nonaccrual

no allowance Total Nonaccrual

loans at the end of the period Loans 90 days

Personal Banking:

Residential mortgage loans $ 15,924 10,402 — 10,402 —

$ 14,476 15,923 — —

Home equity loans 9,123 5,551 207 5,758 —

6,745 8,872 252 —

Vehicle loans 5,533 3,251 12 3,263 —

3,147 5,377 156 1

Consumer loans 1,031 674 1 675 331

1,079 1,030 1 584

Total Personal Banking 31,611 19,878 220 20,098 331

1 unchanged sentence

Commercial real estate loans 44,092 65,529 64,137 129,666 —

18,832 27,079 17,013 —

Commercial real estate loans - owner occupied 3,642 1,233 — 1,233 —

16,032 3,642 — —

Commercial loans 23,487 3,941 3,533 7,474 —

8,559 18,069 5,418 —

Total Commercial Banking 71,221 70,703 67,670 138,373 —

1 unchanged sentence

During the year ended December 31, 2021, we recognized $ 803,000 of interest income on nonaccrual and troubled debt restructuring loans.

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2020 (in thousands):

Real estate Equipment Other Total

Personal Banking:

Residential mortgage loans

$ 1,269 — — 1,269

Home equity loans

Total Personal Banking 1,368 — — 1,368

Commercial Banking:

Commercial real estate loans 79,392 1,997 1,703 83,092

Commercial loans 3,313 197 11,069 14,579

Total Commercial Banking 82,705 2,194 12,772 97,671

Total $ 84,073 2,194 12,772 99,039

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to the composition of originated impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2019, prior to the adoption of ASU 2016-13 (in thousands):

delinquent Nonaccrual

delinquent Loans less

impairment TDRs less

elsewhere Total

loans Average

loans Interest

Personal Banking:

Residential mortgage loans

$ 12,682 1,794 — 6,817 21,293 19,767 688

Home equity loans

5,635 1,110 — 1,654 8,399 8,571 368

Consumer loans

3,610 616 — — 4,226 3,842 179

Total Personal Banking 21,927 3,520 — 8,471 33,918 32,180 1,235

Commercial Banking:

Commercial real estate loans

25,014 9,850 933 10,329 46,126 46,284 1,490

Commercial loans

4,739 3,820 15,916 1,474 25,949 10,179 345

Total Commercial Banking 29,753 13,670 16,849 11,803 72,075 56,463 1,835

Total $ 51,680 17,190 16,849 20,274 105,993 88,643 3,070

The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable at December 31, 2019 prior to the adoption of ASU 2016-13 (in thousands):

Loans collectively evaluated for impairment Loans individually evaluated for impairment Loans individually evaluated for impairment for which there is a related impairment reserve Related

reserve Loans individually evaluated for impairment for which there is no related reserve

The following table presents the amortized cost of our loans on nonaccrual status as of the beginning and end of the year ended December 31, 2020, (in thousands):

Nonaccrual loans at January 1, 2020 December 31, 2020

Nonaccrual loans with an allowance Nonaccrual loans with no allowance Total Nonaccrual

loans at the end of the period Loans 90 days past and accruing

Personal Banking:

Residential mortgage loans $ 14,476 15,924 — 15,924 —

$ 2,860,026 8,101 8,101 560 —

Home equity loans 6,745 8,871 252 9,123 —

1,340,944 1,974 1,974 393 —

Vehicle loans 3,147 5,377 156 5,533 1

Consumer loans 1,079 1,030 1 1,031 584

1,125,123 9 9 3 —

Total Personal Banking 25,447 31,202 409 31,611 585

1 unchanged sentence

Commercial real estate loans 18,832 27,079 17,013 44,092 —

2,718,855 35,535 29,578 2,679 5,957

Commercial real estate loans - owner occupied 16,032 3,642 — 3,642 —

Commercial loans 8,559 18,069 5,418 23,487 —

694,424 23,683 18,337 8,127 5,346

Total Commercial Banking 43,423 48,790 22,431 71,221 —

Total $ 68,870 79,992 22,840 102,832 585

During the year ended December 31, 2020, we recognized $ 842,000 of interest income on nonaccrual and troubled debt restructuring loans.

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to the composition of originated impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2018, prior to the adoption of ASU 2016-13 (in thousands):

delinquent Nonaccrual

delinquent Loans less

impairment TDRs less

elsewhere Total

loans Average

loans Interest

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2021 (in thousands):

Real estate Equipment Other Total

Personal Banking:

2 unchanged sentences

Home equity loans

5,996 1,079 — 1,818 8,893 9,075 511

Consumer loans

3,250 1,072 — — 4,322 4,016 235

Total Personal Banking 679 — — 679

1 unchanged sentence

Commercial real estate loans 119,825 1,705 — 121,530

25,509 11,426 8,549 4,435 49,919 41,328 1,599

Commercial loans 3,973 1,926 — 5,899

3,010 5,091 2,453 2,087 12,641 9,186 507

Total Commercial Banking 123,798 3,631 — 127,429

Total $ 124,477 3,631 — 128,108

The following table provides information related to the evaluation of impaired loans by portfolio segment and by class of financing receivable at December 31, 2018 prior to the adoption of ASU 2016-13 (in thousands):

Loans collectively evaluated for impairment Loans individually evaluated for impairment Loans individually evaluated for impairment for which there is a related impairment reserve Related

reserve Loans individually evaluated for impairment for which there is no related reserve

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2020 (in thousands):

Real estate Equipment Other Total

Personal Banking:

2 unchanged sentences

Home equity loans

1,256,255 2,167 2,167 523 —

Consumer loans

859,684 29 29 6 —

Total Personal Banking 1,368 — — 1,368

70 unchanged sentences

Commercial real estate loans 8 12,006 10,572 1,453

Commercial real estate loans - owner occupied 1 58 48 8

Commercial loans 6 4,147 3,903 451

17 unchanged sentences

Commercial real estate loans 9 7,365 7,615 311

Commercial real estate loans - owner occupied 1 58 48 8

Commercial loans 5 2,944 408 40

28 unchanged sentences

3 — 30 4 — 34

Vehicle loans

Consumer loans

Total Personal Banking 4 114 30 4 — 148

2 unchanged sentences

8 2,077 — 8,424 71 10,572

Commercial loans

6 171 — 3,732 — 3,903

Total Commercial Banking 14 2,248 — 12,156 71 14,475

Total 18 $ 2,362 30 12,160 71 14,623

The following table provides information as of December 31, 2020 for TDRs (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable for modifications during the year ended December 31, 2020 (in thousands):

Type of modification

Number of contracts Rate Payment Maturity date Other Total

Personal Banking:

Residential mortgage loans

1 $ — — 88 — 88

Home equity loans

2 65 — 14 — 79

Total Personal Banking 3 65 — 102 — 167

Commercial Banking:

Commercial real estate loans

9 — — 7,335 280 7,615

Commercial real estate loans - owner occupied 1 — — 48 — 48

3 unchanged sentences

Total 18 $ 65 111 7,702 360 8,238

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information as of December 31, 2019 for TDRs (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable for modifications during the year ended December 31, 2019 (in thousands):

14 unchanged sentences

Total 22 $ 146 2,541 5,336 — 8,023

The following table provides information related to re-modified trouble debt restructurings by portfolio segment and class of financing receivable for modifications during the year ended December 31, 2021 (in thousands):

Type of re-modification

re-modified TDRs Rate Payment Maturity date Other Total

Personal Banking:

Residential mortgage loans

1 $ 114 — — — 114

Home equity loans

Total Personal Banking 2 114 — — — 114

Commercial Banking:

Commercial real estate loans

7 2,077 — 5,108 71 7,256

Total Commercial Banking 7 2,077 — 5,108 71 7,256

Total 9 $ 2,191 — 5,108 71 7,370

NORTHWEST BANCSHARES, INC.

10 unchanged sentences

Home equity loans

Vehicle loans

Consumer loans

Total Personal Banking — — — — — —

8 unchanged sentences

Type of modification

Type of re-modification

re-modified TDRs Rate Payment Maturity date Other Total

11 unchanged sentences

Total 8 $ — 219 4,486 — 4,705

No TDRs modified within the previous twelve months of December 31, 2020 or December 31, 2019 subsequently defaulted.

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to troubled debt restructurings modified within the previous twelve months

of December 31, 2021 that subsequently defaulted:

contracts Recorded

at the time of

modification Current

investment Current

Commercial Banking:

Commercial real estate loans 1 $ 4,167 3,823 —

Total Commercial Banking 1 4,167 3,823 —

Total 1 $ 4,167 3,823 —

No TDRs modified within the previous twelve months of December 31, 2020 or December 31, 2019 subsequently defaulted.

The following table provides information related to the amortized cost basis of loan payment delinquencies at December 31, 2021 (in thousands):

28 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to loan payment delinquencies at December 31, 2019 (in thousands):

The following table provides information related to the amortized cost basis loan payment delinquencies at December 31, 2020 (in thousands):

delinquent 60-89 days

3 unchanged sentences

receivable 90 days or

Originated loans

Personal Banking:

Residential mortgage loans $ 28,797 5,083 14,489 48,369 3,019,752 3,068,121 —

$ 20,447 5,572 11,080 37,099 2,748,090 2,785,189 —

Home equity loans 4,763 1,656 8,441 14,860 1,452,876 1,467,736 —

5,119 2,096 4,573 11,788 1,087,726 1,099,514 —

Vehicle loans 7,707 1,776 4,599 14,082 1,138,592 1,152,674 1

Consumer loans 2,867 966 1,459 5,292 350,027 355,319 584

8,969 3,198 3,467 15,634 1,073,513 1,089,147 —

Total Personal Banking 44,134 9,481 28,988 82,603 5,961,247 6,043,850 585

2 unchanged sentences

6,692 1,615 23,307 31,614 2,816,366 2,847,980 —

Commercial loans

987 6,360 4,296 11,643 652,516 664,159 —

Total Commercial Banking 6,585 7,747 22,255 36,587 2,976,620 3,013,207 —

Total originated loans 41,120 18,613 41,375 101,108 7,885,949 7,987,057 —

Acquired loans

Personal Banking:

Residential mortgage loans 2,849 121 1,695 4,665 78,273 82,938 93

Home equity loans 1,350 309 1,115 2,774 240,630 243,404 53

Consumer loans 239 104 144 487 35,498 35,985 1

Total Personal Banking 4,438 534 2,954 7,926 354,401 362,327 147

Commercial Banking:

Commercial real estate loans 2,323 303 7,055 9,681 395,661 405,342 —

Commercial real estate loans - owner occupied 4,231 — 1,980 6,211 491,698 497,909 —

Commercial loans 6,405 864 7,325 14,594 1,176,516 1,191,110 —

Total Commercial Banking 17,328 2,479 32,612 52,419 4,484,580 4,536,999 —

Total acquired loans 6,961 880 10,452 18,293 803,324 821,617 147

Total $ 48,081 19,493 51,827 119,401 8,689,273 8,808,674 147

(1) Represents acquired loans that were originally recorded at fair value upon acquisition.

These loans are considered to be accruing because we can reasonably estimate future cash flows and expect to fully collect the carrying value of these loans.

Therefore, we are accreting the difference between the carrying value and their expected cash flows into interest income.

Total loans $ 61,462 11,960 61,600 135,022 10,445,827 10,580,849 585

Credit Quality Indicators:

10 unchanged sentences

Their potential weaknesses deserve our close attention and warrant enhanced monitoring.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

Substandard — Loans classified as substandard are inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any.

8 unchanged sentences

instead, it means that it is not practical or desirable to defer writing off all or a portion of a basically worthless loan even though partial recovery may be possible in the future.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

For Personal Banking loans a pass risk rating is maintained until they are greater than 90 days past due, and risk rating reclassification is based primarily on past due status of the loan.

1 unchanged sentence

Pass — Loans classified as pass are homogeneous loans that are less than 90 days past due from the required payment date at month-end.

Substandard — Loans classified as substandard are homogeneous loans that are greater than 90 days past due from the required payment date at month-end, loans classified as TDRs, PCD loans, or homogenous retail loans that are greater than 180 days past due from the requirement payment date at month-end that has been written down to the value of underlying collateral, less costs to sell.

Substandard — Loans classified as substandard are homogeneous loans that are greater than 90 days past due from the required payment date at month-end, loans classified as TDRs, or homogenous retail loans that are greater than 180 days past due from the requirement payment date at month-end that has been written down to the value of underlying collateral, less costs to sell.

Doubtful — Loans classified as doubtful are homogeneous loans that are greater than 180 days past due from the required payment date at month-end and not written down to the value of underlying collateral.

6 unchanged sentences

Based on the most recent analysis performed, the amortized cost basis by risk category of loans by class of loans by origination year is as follows as of December 31, 2021 (in thousands):

December 31, 2020 2019 2018 2017 2016 Prior Revolving loans Revolving loans converted to term loans Total loans

2021 2020 2019 2018 2017 Prior Revolving loans Revolving loans converted to term loans Total loans

Personal Banking:

40 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table sets forth information about credit quality indicators as of December 31, 2019, prior to the adoption of ASU 2016-13 (in thousands):

mention Substandard Doubtful Loss Total loans

Originated loans

Personal Banking:

Residential mortgage loans

$ 2,776,971 — 8,218 — — 2,785,189

Home equity loans

1,093,874 — 5,640 — — 1,099,514

Consumer loans

1,084,986 — 4,161 — — 1,089,147

Total Personal Banking 4,955,831 — 18,019 — — 4,973,850

Commercial Banking:

Commercial real estate loans

2,188,823 70,327 89,898 — — 2,349,048

Commercial loans

571,011 42,352 50,796 — — 664,159

Total Commercial Banking 2,759,834 112,679 140,694 — — 3,013,207

Total originated loans 7,715,665 112,679 158,713 — — 7,987,057

Acquired loans

Based on the most recent analysis performed, the amortized cost basis by risk category of loans by class of loans by origination year is as follows as of December 31, 2020 (in thousands):

2020 2019 2018 2017 2016 Prior Revolving loans Revolving loans converted to term loans Total loans receivable

Personal Banking:

Residential mortgage loans

Pass $ 641,963 418,057 229,477 247,426 215,893 1,289,728 — — 3,042,544

Substandard — 68 1,293 1,674 1,091 21,451 — — 25,577

Total residential mortgage loans 641,963 418,125 230,770 249,100 216,984 1,311,179 — — 3,068,121

Home equity loans

Pass 273,076 193,439 94,757 87,717 81,212 219,061 465,453 40,759 1,455,474

Substandard — 210 318 281 876 5,158 3,509 1,910 12,262

Total home equity loans 273,076 193,649 95,075 87,998 82,088 224,219 468,962 42,669 1,467,736

Vehicle loans

Pass 448,746 352,661 218,372 70,122 31,197 24,791 — — 1,145,889

Substandard 343 1,958 2,087 1,210 667 519 — — 6,784

Total vehicle loans 449,089 354,619 220,459 71,332 31,864 25,310 — — 1,152,673

Consumer loans

Pass 128,809 83,419 35,183 17,439 7,848 11,757 66,965 1,695 353,115

Substandard 133 399 139 192 36 619 686 1 2,205

Total consumer loans 128,942 83,818 35,322 17,631 7,884 12,376 67,651 1,696 355,320

Total Personal Banking 1,493,070 1,050,211 581,626 426,061 338,820 1,573,084 536,613 44,365 6,043,850

Commercial Banking:

Business Banking:

Commercial real estate loans

Pass 417,390 473,115 316,045 264,702 195,168 709,459 36,980 29,755 2,442,614

Special Mention 584 3,381 20,180 24,675 15,424 15,817 597 3,048 83,706

Substandard 7,426 4,007 57,694 56,991 24,056 140,147 2,240 29,100 321,661

Total commercial real estate loans 425,400 480,503 393,919 346,368 234,648 865,423 39,817 61,903 2,847,981

Commercial real estate loans - owner occupied

Pass 24,895 67,162 87,497 71,626 46,760 100,081 4,422 7,648 410,091

Special Mention — 4,371 4,514 3,643 4,276 3,689 3,822 — 24,315

Substandard — 21,627 1,903 12,898 4,013 21,777 874 410 63,502

Total commercial real estate loans - owner occupied 24,895 93,160 93,914 88,167 55,049 125,547 9,118 8,058 497,908

Commercial loans

Total Commercial Banking 395,965 10,271 53,054 — — 459,290

Total acquired loans 755,559 10,271 55,787 — — 821,617

Pass 479,436 99,877 50,915 51,858 58,597 49,178 286,467 16,170 1,092,498

Special Mention 5,828 2,751 5,579 4,588 162 190 16,512 5,668 41,278

Substandard 1,660 3,343 2,932 2,016 2,266 3,003 27,988 14,126 57,334

Total commercial loans 486,924 105,971 59,426 58,462 61,025 52,371 330,967 35,964 1,191,110

Total Business Banking 937,219 679,634 547,259 492,997 350,722 1,043,341 379,902 105,925 4,536,999

Total loans $ 2,430,289 1,729,845 1,128,885 919,058 689,542 2,616,425 916,515 150,290 10,580,849

For the year ended December 31, 2020, $ 23.1 million of revolving loans were converted to term loans.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

Our exposure to credit loss in the event of nonperformance by the other party to off-balance-sheet financial instruments is represented by the contract amount of the financial instrument.

11 unchanged sentences

Collateral held varies but generally may include cash, marketable securities, real estate and other property.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

Outstanding loan commitments at December 31, 2021 for fixed rate loans were $ 185.3 million.

21 unchanged sentences

We do not directly hedge against realized or potential future impairment losses on our MSRs.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table shows changes in MSRs as of and for the years ended December 31, 2021 and 2020:

11 unchanged sentences

$ 10,166 ( 11 ) 10,155

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

During the year ended December 31, 2020, we purchased loans for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination.

The carrying amount of these loans is as follows (in thousands):

Purchase price of loans at acquisition $ 244,546

Allowance for credit losses at acquisition ( 8,845 )

Non-credit premium at acquisition 4,154

Par value of acquired loans at acquisition $ 239,855

Prior to the adoption of ASU 2016-13, acquired loans were initially measured at fair value and subsequently accounted for under either ASC Topic 310-30 or ASC Topic 310-20.

The following table provides information related to the outstanding principal balance and related carrying value of acquired loans for the dates indicated (in thousands):

December 31, 2019

Acquired loans evaluated individually for future credit losses:

Outstanding principal balance $ 7,187

Carrying value 4,975

Acquired loans evaluated collectively for future credit losses:

Outstanding principal balance 826,412

Carrying value 816,642

Total acquired loans:

Outstanding principal balance 833,599

Carrying value 821,617

The following table provides information related to the changes in the accretable discount, which includes income recognized from contractual cash flows for the dates indicated prior to the adoption of ASU 2016-13 (in thousands):

Balance at December 31, 2018 $ 755

Accretion ( 551 )

Net reclassification from nonaccretable yield 966

Balance at December 31, 2019 1,170

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table provides information related to acquired impaired loans by portfolio segment and by class of financing receivable at and for the year ended December 31, 2019 prior to the adoption of ASU 2016-13 (in thousands):

value Outstanding

balance Related

reserve Average

loans Interest

Personal Banking:

Residential mortgage loans $ 742 1,232 7 866 147

Home equity loans 715 1,569 25 861 114

Consumer loans 7 34 1 18 12

Total Personal Banking 1,464 2,835 33 1,745 273

Commercial Banking:

Commercial real estate loans 3,433 4,268 6 3,509 273

Commercial loans 78 84 1 78 5

Total Commercial Banking 3,511 4,352 7 3,587 278

Total loans $ 4,975 7,187 40 5,332 551

(6) Accrued Interest Receivable

6 unchanged sentences

(7) FHLB Stock

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

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

As a member of the FHLB of Pittsburgh, we are required to maintain an investment in the capital stock of the FHLB of Pittsburgh in accordance with their 2015 Capital Plan, at cost, in two subclasses based on the following ranges:

15 unchanged sentences

Our investment in the capital stock of the FHLB of Pittsburgh at December 31, 2021 and December 31, 2020 was $ 10.4 million and $ 8.6 million, respectively.

In addition, our investment of capital stock of the FHLB of Indianapolis at December 31, 2020 was $ 13.1 million and no holdings at December 31, 2019.

We received dividends on capital stock during the years ended

In addition, our investment of capital stock of the FHLB of Indianapolis at December 31, 2021 was $ 3.8 million and $ 13.1 million at December 31, 2020.

We received dividends on capital stock during the years ended December 31, 2021 and 2020 of $ 407,000 and $ 981,000 , respectively.

Future dividends may be established at different rates for the two subclasses of capital stock.

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

December 31, 2020 and 2019 of $ 981,400 and $ 1.1 million, respectively.

Future dividends may be established at different rates for the two subclasses of capital stock.

(8) Premises and Equipment

16 unchanged sentences

Customer and Contract intangible assets - gross $ 12,775 12,775

Customer list intangible assets disposed of due to sale of insurance business ( 1,547 ) —

accumulated amortization ( 11,133 ) ( 10,842 )

19 unchanged sentences

Balance at December 31, 2020 382,279

Goodwill acquired 36,176

Purchase accounting adjustment 77

Goodwill disposed of due to sale of insurance business ( 1,359 )

Balance at December 31, 2021 $ 380,997

Quarterly, the Company evaluates whether there are any triggering events that would require an update to our previous goodwill assessment.

During the first quarter of 2020, the Company determined the COVID-19 pandemic and its negative effect on the global economy to be a triggering event.

As a result, the Company, with the assistance of a third-party specialist, performed a quantitative impairment analysis in accordance with ASU 2017-04 as of March 31, 2020.

This analysis indicated the aggregate fair value of Northwest Bank, the sole reporting unit of Northwest Bancshares, Inc., exceeded the carrying value and therefore goodwill was not impaired.

As of December 31, 2020 and 2019, there were no events or changes in circumstances that would cause us to update that goodwill impairment test and we have concluded there is no impairment in goodwill.

We have determined that goodwill is not impaired as of December 31, 2021 and 2020.

There were no events or changes in circumstances that would cause us to update that goodwill impairment test as of June 30, 2021 and 2020.

(10) Deposits

8 unchanged sentences

Generally, deposits in excess of $250,000 are not federally insured.

At December 31, 2020 we had $ 3.744 billion of deposits in accounts exceeding $250,000.

At December 31, 2021 and 2020, we had $ 4.194 billion and $ 3.744 billion of deposits in accounts exceeding $250,000, respectively.

The following table summarizes the contractual maturity of time deposits at December 31, 2021 and 2020:

25 unchanged sentences

Payable to the FHLB of Indianapolis acquired from MutualBank $ — — % $ 22,054 1.92 %

Payable to the FHLB of Pittsburgh — — % 153,600 2.38 %

Total term notes payable to the FHLB — 22,054

Collateralized borrowings, due within one year 139,093 0.19 % 137,661 0.19 %

Subordinated debentures, net of issuance costs 123,329 4.00 % — — %

Total borrowed funds $ 139,093 $ 159,715

Borrowings from the FHLB of Pittsburgh and Indianapolis, if any, are secured by our residential first mortgage and other qualifying loans.

Borrowings from the Federal Home Loan Banks (“FHLB”) of Pittsburgh and Indianapolis, if any, are secured by our residential first mortgage and other qualifying loans.

Certain of these borrowings are subject to restrictions or penalties in the event of prepayment.

During the year ended December 31, 2021, $ 22.0 million of term notes payable to the FHLB of Indianapolis matured.

The revolving line of credit with the FHLB of Pittsburgh carries a commitment of $ 250.0 million.

The rate is adjusted daily by the FHLB of Pittsburgh, and any borrowings on this line may be repaid at any time without penalty.

The revolving line of credit had no balance as of December 31, 2021 and December 31, 2020.

At December 31, 2021 and December 31, 2020, collateralized borrowings due within one year were $ 139.1 million and $ 137.7 million, respectively.

The collateralized borrowings are collateralized by various securities held in safekeeping by the FHLB of Pittsburgh.

These borrowings are collateralized by cash or various securities held in safekeeping by the FHLB.

The market value of these securities exceeds the value of the collateralized borrowings .

4 unchanged sentences

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

At December 31, 2021 and December 31, 2020, subordinated debentures, net of issuance costs, were $ 123.6 million and $ 123.3 million, respectively.

(b) Trust Preferred Securities

Prior to our merger with MutualBank on April 24, 2020, the Company had five statutory business trusts:

Northwest Bancorp Capital Trust III, a Delaware statutory business trust, Northwest Bancorp Statutory Trust IV, a Connecticut statutory business trust, LNB Trust II, a Delaware statutory business trust, Union National Capital Trust I ("UNCT I"), a Delaware statutory business trust, and Union National Capital Trust II ("UNCT II"), a Delaware statutory business trust (the Trusts).

As a result of the merger with MutualBank, we acquired two additional statutory business trusts:

MFBC Statutory Trust I and Universal Preferred Trust;

The Company has seven statutory business trusts:

Northwest Bancorp Capital Trust III, a Delaware statutory business trust, Northwest Bancorp Statutory Trust IV, a Connecticut statutory business trust, LNB Trust II, a Delaware statutory business trust, Union National Capital Trust I (“UNCT I”), a Delaware statutory business trust, Union National Capital Trust II (“UNCT II”), a Delaware statutory business trust, MFBC Statutory Trust I, a Delaware statutory trust, and Universal Preferred Trust, a Delaware statutory trust (the “Trusts”).

The Trusts exist solely to issue preferred securities to third parties for cash, issue common securities to

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

Delaware statutory trusts.

The Trusts exist solely to issue preferred securities to third parties for cash, issue common securities to the Company in exchange for capitalization of the Trusts, invest the proceeds from the sale of trust securities in an equivalent amount of debentures of the Company, and engage in other activities that are incidental to those previously listed.

the Company in exchange for capitalization of the Trusts, invest the proceeds from the sale of trust securities in an equivalent amount of debentures of the Company, and engage in other activities that are incidental to those previously listed.

The Trusts have invested the proceeds of the offerings in junior subordinated deferrable interest debentures issued by the Company.

47 unchanged sentences

Shareholders’ equity for pension adjustment 9,659 ( 3,774 ) ( 2,859 )

Shareholders’ equity for swap fair value adjustment — — 223

Unallocated income tax $ 46,035 18,959 31,812

30 unchanged sentences

Pension and post-retirement benefits 9,747 19,405

Unrealized loss on the fair value of securities available-for-sale 4,093 —

Deferred income 341 540

6 unchanged sentences

Pension expense 6,993 6,198

Purchase accounting — 291

Intangible assets 16,543 15,419

9 unchanged sentences

We have $ 4.3 million of federal net operating loss carryovers subject to the annual limitation under Internal Revenue Code Section 382 at December 31, 2021.

The carryovers begins to expire in 2029 and are expected to be fully realized.

We have $ 39.7 million of Indiana net operating loss carryovers at December 31, 2020 which begin to expire in 2025 and are expected to be fully realized.

The carryovers begin to expire in 2029 and are expected to be fully realized.

We have $ 38.1 million of Indiana net operating loss carryovers subject to annual limitation as Indiana conforms to the Internal Revenue Code Section 382 at December 31, 2021.

The carryovers begin to expire in 2025.

Due to limitation, we do not expect to realize $ 7.6 million of the Indiana net operating loss carryover.

This is netted against the net operating loss deferred tax asset in the preceding table.

We recorded a valuation allowance against state deferred tax assets of a Northwest subsidiary since the subsidiary is not expected to utilize its deferred tax assets in the foreseeable future.

This valuation allowance, which is $ 333 K as of December 31, 2020, is netted against other deferred tax assets in the preceding table.

The Company is not required to provide deferred taxes on MutualBank’s tax loan loss reserve as of December 31, 1987.

As of December 31, 2020, MutualBank had unrecognized deferred income taxes of approximately $ 3.1 million with respect to this reserve.

This reserve could be recognized as taxable income and create a current and/or deferred tax liability using the income tax rates then in effect if one of the following occur:

(1) the Bank’s retained earnings represented by this reserve are used for distributions in liquidation or for any other purpose other than to absorb losses from bad debts;

(2) the Bank fails to qualify as a Bank, as provided by the Internal Revenue Code;

or (3) there is a change in federal tax law.

This valuation allowance is netted against other deferred tax assets in the preceding table.

Other than stated above, we have determined that no valuation allowance is necessary for the deferred tax assets because it is more likely than not that these assets will be realized through future reversals of existing temporary differences and through future taxable income.

We will continue to review the criteria related to the recognition of deferred tax assets on a regular basis.

We utilize a comprehensive model to recognize, measure, present and disclose in our financial statements uncertain tax positions that the company has taken or expects to take on a tax return.

We utilize a comprehensive approach to recognize, measure, present and disclose in our financial statements uncertain tax positions that the company has taken or expects to take on a tax return.

We recognize interest accrued and penalties (if any) related to unrecognized tax benefits in income tax expense.

The accrual for interest and penalties was not material for all years present.

The accrual for interest and penalties was not material for all years presented.

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table presents changes in unrecognized tax benefits for the year ended December 31, 2020:

The following table presents changes in unrecognized tax benefits at December 31, 2021, 2020 and 2019:

Year ended December 31,

2021 2020 2019

Unrecognized tax benefits:

24 unchanged sentences

During the year ended December 31, 2021, 2,146,897 stock options were not included in the computation of diluted earnings per share because the stock options’ exercise price was more than the average market price of the common shares of $ 13.80 .

During the years ending December 31, 2019 and 2018, all stock options outstanding were included in the computation of diluted earnings per share because the stock options’exercise price was less than the average market price of the common shares of $ 17.07 and $ 17.20 , respectively.

During the year ended December 31, 2020, 4,677,841 stock options were not included in the computation of diluted earnings per share because the stock options’ exercise price was more than the average market price of the common shares of $ 11.54 .

During the year ended December 31, 2019, all stock options outstanding were included in the computation of diluted earnings per share because the stock options’ exercise price was less than the average market price of the common shares of $ 17.07 .

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

The computation of basic and diluted earnings per share for the years ended December 31, 2020, 2019 and 2018 follows:

The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2021, 2020 and 2019.

Years ended December 31,

2021 2020 2019

Net income $ 154,323 74,854 110,432

Dividends and undistributed earnings allocated to participating securities 1,010 — —

Net income available to common shareholders $ 153,313 74,854 110,432

Weighted average common shares outstanding (1) 126,181,586 120,244,474 104,878,774

Dilutive potential shares due to effect of stock options (1) — 960,375 1,492,013

Participating shares outstanding 828,251 — 960,375

Total weighted average common shares and dilutive potential shares (1) 127,009,837 120,244,474 105,839,149

10 unchanged sentences

We provide a matching contribution of 100 % of each employee’s contribution to a maximum of 4 % of the employee’s compensation.

Effective August 1, 2020, the Plan was amended to include a soft freeze.

Effective August 1, 2020, the Pension Plan was amended to include a soft freeze.

The soft freeze will allow those employees in an eligible position that were hired, rehired, or acquired on or before July 31, 2020, to continue to vest and accrue additional benefits for each year they are credited with 1,000 hours or more.

1 unchanged sentence

Total expense for all retirement plans, including defined benefit pension plans, was approximately $ 10.1 million, $ 8.2 million and $ 6.7 million, for the years ended December 31, 2021, 2020 and 2019, respectively.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

Components of net periodic pension cost and other amounts recognized in other comprehensive income:

The following table sets forth the net periodic pension cost for the defined benefit pension plans for the years ended December 31, 2020, 2019 and 2018:

The following table sets forth components of net periodic pension cost and other amounts recognized in other comprehensive income for the years ended December 31, 2021, 2020 and 2019.

Years ended December 31,

2021 2020 2019

Defined benefit pension plan:

Service cost $ 11,440 8,391 5,949

3 unchanged sentences

Amortization of the net loss 4,156 3,695 3,423

Net periodic pension cost $ 4,257 3,366 2,775

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table sets forth other changes in the defined benefit pension plans’ plan assets and benefit obligations recognized in other comprehensive income:

Years ended December 31,

2020 2019 2018

Net periodic pension cost, defined benefit pension plans 5,485 4,257 3,366

Other changes in defined benefit pension plan recognized in other comprehensive income:

Net (gain)/loss ( 36,552 ) 11,521 8,235

2 unchanged sentences

Total recognized in net periodic pension cost and other comprehensive income $ ( 28,745 ) 18,101 13,924

The estimated net loss and prior service credit for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic cost over the next year is $ 4.0 million and $( 2.3 ) million, respectively.

The estimated net loss and prior service credit for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic cost ending December 31, 2022 is $ 1.5 million and $ 4.0 million, respectively.

The following table sets forth information for the defined benefit pension plans’ funded status at December 31, 2021 and 2020:

3 unchanged sentences

Interest cost 6,070 6,855

Actuarial loss 29,084 35,203

Actuarial (gain)/loss ( 19,834 ) 29,084

Benefits paid ( 9,331 ) ( 8,238 )

7 unchanged sentences

Funded status at end of year $ ( 7,496 ) ( 41,717 )

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table sets forth the assumptions used to develop the net periodic pension cost:

12 unchanged sentences

We use the FTSE (previously Citigroup) Pension Liability Index rates matching the duration of our benefit payments as of the measurement date to determine the discount rate.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

The accumulated benefit obligation for the funded defined benefit pension plan was $ 243.6 million, $ 254.2 million, and $ 217.3 million at December 31, 2021, 2020 and 2019, respectively.

16 unchanged sentences

The average maturity of the bond portfolio shall not exceed ten years .

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table sets forth the weighted average asset allocation of defined benefit plans:

7 unchanged sentences

The following tables sets forth the pension plan assets as of December 31, 2021 and 2020.

December 31, 2020

Assets at Fair Value

Level 1 Assets

Defined benefit pension assets:

4 unchanged sentences

Total defined benefit pension plan assets (1) $ 239,262 216,712

(1) The defined benefit pension plan statement of net assets also includes accrued interest and dividends resulting in net assets available for benefits of $ 216.9 million.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

December 31, 2019

Assets at Fair Value

Level 1 Assets

Defined benefit pension assets:

Common stock $ 45,198 45,198

Mutual funds 127,186 127,186

Money market funds 12,024 12,024

Other 8,953 8,953

Total defined benefit pension plan assets (1) $ 193,361 193,361

(1) The defined benefit pension plan statement of net assets also includes accrued interest and dividends resulting in net assets available for benefits of $ 193.5 million.

(1) The defined benefit pension plan statement of net assets also includes accrued interest and dividends resulting in net assets available for benefits of $ 239.4 million and $ 216.9 million, respectfully.

The benefits expected to be paid in each year from 2022 to 2026 are $ 8.0 million, $ 8.8 million, $ 8.9 million, $ 9.4 million and $ 9.8 million, respectively.

17 unchanged sentences

Total recognized in net periodic benefit cost and other comprehensive loss $ ( 10 ) ( 7 ) ( 355 )

The estimated net loss for the post-retirement healthcare benefit plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the year ending December 31, 2021 is $ 14,000 .

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

The following table sets forth the funded status of the post-retirement healthcare benefit plan at December 31, 2021 and 2020:

4 unchanged sentences

Benefits paid ( 236 ) ( 111 )

Defined benefit plan acquired from MutualBank — 1,037

Benefit obligation at end of year $ 1,560 1,807

20 unchanged sentences

In addition, on May 25, 2021, we awarded employees 293,755 restricted common shares and directors 27,000 restricted common shares with a grant date fair value of $ 13.68 .

These common shares vest over a seven-year period with the first vesting occurring on the grant date.

These common shares vest over a five-year period with the first vesting occurring on the grant date.

Also during 2021, we awarded discretionary grants of 13,452 common shares with a weighted average grant date fair value of $ 13.76 .

Total common shares forfeited from the 2018 plan were 163,267 , of which 46,650 shares were forfeited during the year ended December 31, 2021.

Forfeited shares may be awarded to other eligible recipients in future grants until the plan termination date in 2028.

(d) Stock Option Plans

The Northwest Bancshares, Inc.

2018 Equity Incentive Plan also authorized the granting of 3,500,000 stock options authorized for award.

On May 14, 2018, we granted employees 831,160 stock options and outside directors 64,800 stock options with an exercise price of $ 16.59 per share.

On May 22, 2019, we granted employees 547,410 stock options and outside directors 64,800 stock options with an exercise price of $ 17.27 per share.

On May 20, 2020, we granted employees 556,476 stock options and directors

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

57,600 stock options with an exercise price of $ 9.71 per share.

These awarded stock options vest over a seven-year period with the first vesting occurring on the grant date with a ten-year exercise period from the grant date.

(d) Stock Option Plans

The Northwest Bancshares, Inc.

2018 Equity Incentive Plan also authorized the granting of 3,500,000 stock options authorized for award.

On May 22, 2019, we granted employees 547,410 stock options and outside directors 64,800 stock options with an exercise price of $ 17.27 per share.

On May 20, 2020, we granted employees 556,476 stock options and outside directors 57,600 stock options with an exercise price of $ 9.71 per share.

On May 25, 2021, we granted employees 621,972 stock options and directors 72,000 stock options with an exercise price of $ 13.68 per share.

These awarded stock options vest over a five-year period with the first vesting occurring on the grant date with a ten-year exercise period from the grant date.

The following table summarizes the activity in our option plans during the years ended December 31, 2021, 2020 and 2019 (amounts in this table are not in thousands):

14 unchanged sentences

(2) The total intrinsic value of options exercised was $ 2.3 million, $ 444,000 and $ 5.2 million, respectively.

The aggregate intrinsic value of all options expected to vest and fully vested options were both zero because the average exercise price was more than the closing market price per share at December 31, 2020.

The aggregate intrinsic value of all options expected to vest and fully vested options at December 31, 2021 is $ 448,066 and $ 26,973 , respectively.

The following table summarizes the number of options outstanding, number of options exercisable, and weighted average remaining life of all option grants as of December 31, 2021 (amounts in this table are not in thousands):

15 unchanged sentences

Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

Financial assets and liabilities recognized or disclosed at fair value on a recurring basis and certain financial assets and liabilities on a non-recurring basis are accounted for using a three-level hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable.

This hierarchy gives the highest priority to quoted prices with readily available independent data in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable market

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

inputs (Level 3).

When various inputs for measurement fall within different levels of the fair value hierarchy, the lowest level input that has a significant impact on fair value measurement is used.

26 unchanged sentences

Debt securities — held-to-maturity - The fair value of debt securities held-to-maturity is determined in the same manner as debt securities available-for-sale.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

Loans Receivable

6 unchanged sentences

The estimated fair value of loans held-for-sale is based on market bids obtained from potential buyers.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

Loans Held for Investment

The fair value of the loans held for investment is estimated using a discounted cash flow analysis that utilizes interest rates

currently being offered for similar loans adjusted for liquidity and credit risk.

Due to the restrictions placed on the transferability of FHLB stock, it is not practical to determine the fair value.

8 unchanged sentences

The carrying amount of repurchase agreements approximates their fair value.

Subordinated Debentures

The fair value of our subordinated debentures is calculated using the discounted cash flows at rates observable for other similarly traded liabilities.

5 unchanged sentences

The fair value of forward sale commitments is based on quoted prices from the secondary market based on the settlement date of the contracts.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

Cash Flow Hedges, Interest Rate and Foreign Exchange Swap Agreements

10 unchanged sentences

However, the fair value of commitments to extend credit and standby letters of credit is estimated using the fees currently charged to enter into similar agreements.

Commitments to extend credit are generally short-term in nature and, if drawn upon, are issued under current

Commitments to extend credit are generally short-term in nature and, if drawn upon, are issued under current market terms.

At December 31, 2021 and 2020, there was no significant unrealized appreciation or depreciation on these financial instruments.

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

market terms.

At December 31, 2020 and 2019, there was no significant unrealized appreciation or depreciation on these financial instruments.

The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the Consolidated Statement of Financial Condition at December 31, 2021 and 2020:

17 unchanged sentences

Borrowed funds 139,093 139,093 139,093 — —

Subordinated debt 123,575 129,138 — 129,138 —

Junior subordinated debentures 129,054 120,083 — — 120,083

Foreign exchange swaps 341 341 — 341 —

Interest rate swaps not designated as hedging instruments 31,357 31,357 — 31,357 —

18 unchanged sentences

Forward commitments 1,105 1,105 — 1,105 —

Interest rate swaps 20,889 20,889 — 20,889 —

Interest rate swaps not designated as hedging instruments 53,863 53,863 — 53,863 —

FHLB stock 21,748 21,748 — — —

1 unchanged sentence

Financial liabilities:

Savings and checking deposits $ 7,022,597 7,022,597 7,022,597 — —

Savings and checking accounts $ 9,957,137 9,957,137 9,957,137 — —

Time deposits 1,642,096 1,669,546 — — 1,669,546

Borrowed funds 159,715 159,745 159,745 — —

Subordinated debt 123,329 123,329 — 123,329 —

Junior subordinated debentures 128,794 121,106 — — 121,106

Interest rate swaps 20,952 20,952 — 20,952 —

Interest rate swaps not designated as hedging instruments 54,579 54,579 — 54,579 —

Risk participation agreements 86 86 — 86 —

29 unchanged sentences

Total assets $ — 1,580,217 1,684 1,581,901

Foreign exchange swaps $ — 341 — 341

Interest rate swaps not designated as hedging instruments — 31,357 — 31,357

12 unchanged sentences

States and political subdivisions — 116,813 — 116,813

Corporate — 919 — 919

Total debt securities — 252,237 — 252,237

11 unchanged sentences

Forward commitments — 1,105 — 1,105

Interest rate swaps — 20,889 — 20,889

Interest rate swaps not designated as hedging instruments — 53,863 — 53,863

Total assets $ — 1,453,909 6,465 1,460,374

Interest rate swaps — 20,952 — 20,952

Interest rate swaps not designated as hedging instruments $ — 54,579 — 54,579

Risk participation agreements — 86 — 86

Total liabilities $ — 54,665 — 54,665

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2020 and 2019:

The following table presents the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the year ended December 31, 2021 and 2020:

Years ended December 31,

Beginning balance January 1, $ 6,465 559

5 unchanged sentences

Ending balance December 31, $ 1,684 6,465

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans held for sale, loans measured for impairment, real estate owned, and MSRs.

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans held for sale, loans individually assessed, real estate owned, and MSRs.

NORTHWEST BANCSHARES, INC.

7 unchanged sentences

Loans individually assessed $ — — 46,968 46,968

Mortgage servicing rights — — 380 380

Real estate owned, net — — 873 873

6 unchanged sentences

Total assets $ — — 97,535 97,535

Loans individually assessed - A loan is considered to be individually assessed as described in Note 1(f) as part of the adoption of ASU 2016-13.

Individually Assessed Loans - A loan is considered to be individually assessed as described in Note 1(f) as part of the adoption of ASU 2016-13.

We classify loans individually assessed as nonrecurring Level 3.

Mortgage servicing rights - Mortgage servicing rights represent the value of servicing residential mortgage loans, when the mortgage loans have been sold into the secondary market and the associated servicing has been retained.

The value is determined through a discounted cash flow analysis, which uses interest rates, prepayment speeds and delinquency rate assumptions as inputs.

All of these assumptions require a significant degree of management judgment.

Servicing rights and the related mortgage loans are segregated into categories or homogeneous pools based upon common characteristics.

Adjustments are only made when the estimated discounted future cash flows are less than the carrying value, as determined by individual pool.

As such, mortgage servicing rights are classified as nonrecurring Level 3.

Real Estate Owned - Real estate owned is comprised of property acquired through foreclosure or voluntarily conveyed by borrowers.

Assets are recorded on the date acquired at the lower of the related loan balance or fair value, less estimated disposition costs, with the fair value being determined by appraisal.

These assets are recorded on the date acquired at the lower of the related loan balance or fair value, less estimated disposition costs, with the fair value being determined by appraisal.

Subsequently, foreclosed assets are valued at the lower of the amount recorded at acquisition date or fair value, less estimated disposition costs.

7 unchanged sentences

Discounted cash flow Discount rate 8.60 % to 12.95 % ( 9.61 %)

Mortgage servicing rights 380 Discounted cash flow Annual service cost $ 84

Prepayment rate 7.1 % to 23.6 % ( 11.0 %)

Expected life (months) 42.2 to 103.1 (72.8)

Option adjusted spread 650 basis points

Forward yield curve 0.09 % to 1.51 %

Real estate owned, net 873 Appraisal value (1) Estimated cost to sell 10 %

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral dependent.

Loans held for sale 25,056 Quoted prices for similar loans in active markets adjusted by an expected pull-through rate Estimated pull-through rate 100 %

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

(17) Regulatory Capital Requirements

6 unchanged sentences

As of December 31, 2021 and 2020, we and our banking subsidiary exceeded all capital adequacy requirements to which we were subject.

We have elected to phase the estimated impact of CECL into regulatory capital in accordance with the interim final rule of the Board of Governors of the Federal Reserve System (FRB) and other U.S.

banking agencies that became effective on March 31, 2020.

As a result, we will delay recognizing the estimated impact of CECL on regulatory capital until after a two-year deferral period, which for us extends through December 31, 2021.

As of December 15, 2021, the most recent assessment from FDIC, Northwest Bank exceeded all regulatory capital requirements and their regulatory capital ratios were above the minimum levels required to be considered “well-capitalized” for regulatory purposes .

To be considered as “well capitalized,” Northwest Bank must maintain total risk-based, Tier 1 risk-based, CET 1 risk-based, and Tier 1 leverage ratios as set forth in the table.

There are no conditions or events since that notification that management believes have changed the bank’s categories.

NORTHWEST BANCSHARES, INC.

3 unchanged sentences

(All dollar amounts presented in tables are in thousands, except as indicated)

As of December 15, 2020, the most recent assessment from FDIC, Northwest Bank exceeded all regulatory capital requirements and their regulatory capital ratios were above the minimum levels required to be considered “well-capitalized” for regulatory purposes .

To be considered as “well capitalized,” the bank must maintain total risk-based, Tier 1 risk-based, CET 1 risk-based, and Tier 1 leverage ratios as set forth in the table.

There are no conditions or events since that notification that management believes have changed the bank’s categories.

The actual, required, and well capitalized levels as of December 31, 2021 and 2020 were as follows:

15 unchanged sentences

Northwest Bank 1,467,362 14.889 % 689,879 7.000 % 640,602 6.500 %

Tier 1 capital (leverage)

(to average assets)

Tier 1 capital (leverage to average assets)

Northwest Bancshares, Inc.

20 unchanged sentences

Northwest Bank 1,354,028 13.636 % 695,103 7.000 % 645,453 6.500 %

Tier 1 capital (leverage)

(to average assets)

Tier 1 capital (leverage to average assets)

Northwest Bancshares, Inc.

18 unchanged sentences

Due to the inherent subjectivity of assessments and unpredictability of outcomes of legal proceedings, any amounts accrued may not represent the ultimate loss to us from legal proceedings.

During the year-ended December 31, 2018, Northwest and our subsidiary, Northwest Insurance Services (“NWIS”), were involved in a lawsuit against, among others, First National Bank of Pennsylvania (“FNB”) and their insurance subsidiary, First National Insurance Agency, LLC (“FNIA”).

During the year-ended December 31, 2018, Northwest and our subsidiary, The Bert Company (doing business as Northwest Insurance Services) (“NWIS”), were involved in a lawsuit against, among others, First National Bank of Pennsylvania (“FNB”) and their insurance subsidiary, First National Insurance Agency, LLC (“FNIA”).

All counterclaims against Northwest were discontinued and, in December 2018, a verdict was rendered in favor of NWIS on several of its claims.

2 unchanged sentences

The following table sets forth the components of accumulated other comprehensive loss as of December 31, 2021 and 2020:

Unrealized gain on marketable securities available-for-sale $ 16,843 3,147

Unrealized gain/(loss) on marketable securities available-for-sale $ ( 12,317 ) 16,843

Defined benefit pension plans ( 25,312 ) ( 50,392 )

2 unchanged sentences

Unrealized gains and losses on securities

available-for-sale Change in

fair value of

interest rate

swaps Change in defined

available-for-sale Change in defined

benefit pension plans Total

4 unchanged sentences

Balance as of December 31, $ ( 12,317 ) ( 25,312 ) ( 37,629 )

(1) Consists of unrealized holding gains, net of tax of $ 5,607 .

(2) Consists of unrealized holdings losses, net of tax $( 209 ).

(1) Consists of unrealized holding losses, net of tax of ($ 10,333 ).

(4) Consists of realized gains, net of tax of $( 6 ).

(5) Consists of realized losses interest rate swaps , net of tax of $ 209 .

(2) Consists of unrealized holdings gains, net of tax $ 9,144 .

(3) Consists of realized holding losses, net of tax of ($ 92 ).

(4) Consists of realized gains, net of tax of $ 515 .

5 unchanged sentences

The following table shows the changes in accumulated other comprehensive loss by component for the year ended December 31, 2020:

Unrealized gains and losses on securities available-for-sale Change in defined

Unrealized gains and losses on securities available-for-sale Change in

fair value of

interest rate

swaps Change in defined

benefit pension plans Total

6 unchanged sentences

(2) Consists of unrealized holding losses, net of tax of ($ 209 ).

(3) Consists of unrealized holding losses, net of tax of ($ 4,169 ).

(4) Consists of realized gains, net of tax of ($ 6 ).

(5) Consists of realized losses interest rate swaps, net of tax of $ 209 .

(6) Consists of realized gains, net of tax of $ 395 .

1 unchanged sentence

Unrealized gains and losses on securities

available-for-sale Change in

fair value of

interest rate

swaps Change in

pension plans Total

available-for-sale Change in defined benefit pension plans Total

Balance as of January 1, $ ( 6,832 ) ( 32,864 ) ( 39,696 )

Reclassification due to adoption of ASU No.

2018-02 ( 991 ) ( 149 ) ( 5,606 ) ( 6,746 )

Other comprehensive income/(loss) before reclassification adjustments (1), (2) 9,984 ( 8,059 ) 1,925

2 unchanged sentences

Balance as of December 31, $ 3,147 ( 40,088 ) ( 36,941 )

(1) Consists of unrealized holding losses, net of tax of $( 513 ).

(2) Consists of unrealized holding losses, net of tax of $ 223 .

(1) Consists of unrealized holding gains, net of tax of $ 3,994 .

(2) Consists of unrealized holding losses, net of tax of ($ 3,193 ).

1 unchanged sentence

(4) Consists of realized gains, net of tax of $ 334 .

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

(21) Parent Company Only Financial Statements - Condensed

10 unchanged sentences

Total liabilities and shareholders’ equity $ 1,811,560 1,766,923

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

Statements of Income

13 unchanged sentences

Net income $ 154,323 74,854 110,432

* The dividend paid by Northwest Bank to Northwest Bancshares, Inc.

was subsequently paid in January 2021 in the amount of $ 73.0 million.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

(All dollar amounts presented in tables are in thousands, except as indicated)

Statements of Cash Flows

29 unchanged sentences

We believe that the credit risk inherent in all of our derivative contracts is minimal based on our credit standards and the netting and collateral provisions of the interest rate swap agreements.

(a) Derivatives Designated as Hedging Instruments

Derivatives Designated as Hedging Instruments

During March 2020, the Company entered into four separate pay-fixed interest rate swaps in order to synthetically convert short-term three month FHLB advances to fixed-rate term funding with an aggregate value of $ 100 million with maturities ranging from three to five years .

Our risk management objective and strategy for these interest rate swaps was to reduce our exposure to variability in interest-related cash outflows attributable to changes in the USD-LIBOR swap rate, or its commercially accepted replacement, the designated benchmark interest rate being hedged.

Based upon our contemporaneous quantitative analysis at the inception of each interest rate swap, we determined these interest rate swaps qualified for hedge accounting in accordance with ASC 815, Derivatives and Hedging .

Our risk management objective and strategy for these interest rate swaps at such time was to reduce our exposure to variability in interest-related cash outflows attributable to changes in the USD-LIBOR swap rate, the designated benchmark interest rate being hedged.Based upon our contemporaneous quantitative analysis at the inception of each interest rate swap, we have determined these interest rate swaps qualified for hedge accounting in accordance with ASC 815, Derivatives and Hedging .

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

During the quarter of September 30, 2020, the Company discontinued these cash flow hedges and, as a result, reclassified a $ 1.3 million loss into earnings.

(b) Derivatives Not Designated as Hedging Instruments

As of December 31, 2021, the Company had no cash flow hedges.

Derivatives Not Designated as Hedging Instruments

We act as an interest rate or foreign exchange swap counterparty for certain commercial borrowers in the normal course of servicing our customers, which are accounted for at fair value.

24 unchanged sentences

Interest rate swap agreements $ 644,997 31,254 644,997 31,357

Foreign exchange swap agreements — — 17,124 341

Interest rate lock commitments 67,473 1,684 — —

9 unchanged sentences

Total derivatives $ 796,131 61,433 676,832 54,665

The following table indicates the gain or loss recognized in income on derivatives for the periods indicated:

The following table presents income or expenses recognized on derivatives for the periods indicated:

For the years ended December 31,

2021 2020 2019

Hedging derivatives:

Decrease in interest expense $ — ( 35 ) —

Non-hedging swap derivatives:

Decrease in other income $ ( 700 ) ( 63 ) ( 288 )

Increase/(decrease) in other income 1,033 ( 700 ) ( 63 )

Increase in mortgage banking income 5,515 6,867 —

Hedging interest rate derivatives:

Increase/(decrease) in interest expense ( 35 ) — 949

(24) Selected Quarterly Financial Data - Unaudited

Quarters ended

March 31, 2020

June 30, 2020

September 30, 2020

December 31, 2020

(In thousands, except per share data)

Interest income $ 100,378 108,547 113,414 111,729

Interest expense 13,150 10,469 9,880 8,841

Net interest income 87,228 98,078 103,534 102,888

Provision for credit losses 27,637 51,750 6,818 ( 2,230 )

Noninterest income 27,976 35,496 36,670 32,123

Noninterest expense 78,611 89,163 86,869 92,849

Income/(loss) before income taxes 8,956 ( 7,339 ) 46,517 44,392

Income tax expense/(benefit) 1,017 ( 1,139 ) 8,467 9,327

Net income/(loss) $ 7,939 ( 6,200 ) 38,050 35,065

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

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

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018

(All dollar amounts presented in tables are in thousands, except as indicated)

Quarters ended

March 31, 2019

June 30, 2019

September 30, 2019

December 31, 2019

(In thousands, except per share data)

Interest income $ 100,289 106,807 106,866 103,418

Interest expense 12,307 14,204 15,930 14,473

Net interest income 87,982 92,603 90,936 88,945

Provision for credit losses 6,467 4,667 3,302 8,223

Noninterest income 21,662 23,363 26,169 28,213

Noninterest expense 71,424 77,512 70,596 76,571

Income before income taxes 31,753 33,787 43,207 32,364

Income tax expense 6,709 7,404 9,793 6,773

Net income $ 25,044 26,383 33,414 25,591

Basic earnings per share $ 0.24 0.25 0.32 0.24

Diluted earnings per share $ 0.24 0.25 0.31 0.24

Quarters ended

March 31, 2018

June 30, 2018

September 30, 2018

December 31, 2018

(In thousands, except per share data)

Interest income $ 89,533 92,875 95,605 97,768

Interest expense 7,766 8,649 9,788 10,937

Net interest income 81,767 84,226 85,817 86,831

Provision for credit losses 4,209 5,349 6,982 3,792

Noninterest income 21,788 24,109 22,557 23,248

Noninterest expenses 67,421 69,787 66,617 72,273

Income before income taxes 31,925 33,199 34,775 34,014

Income tax expense 6,940 6,900 7,035 7,547

Net income $ 24,985 26,299 27,740 26,467

Basic earnings per share $ 0.25 0.26 0.27 0.26

Diluted earnings per share $ 0.24 0.25 0.27 0.26

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

1 unchanged sentence

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 8. Financial Statements and Supplementary Data