What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-05-06 compared with 2021-11-04 · 165 added, 458 removed, 1034 unchanged (38% of the section changed)

4 unchanged sentences

(in thousands, except share data)

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Cash and cash equivalents $ 1,161,006 1,279,259

42 unchanged sentences

See accompanying notes to unaudited Consolidated Financial Statements.

Tabl e of Contents

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

(in thousands, except share data)

Quarter ended September 30, Nine months ended September 30,

2021 2020 2021 2020

Quarter ended March 31,

Interest income:

11 unchanged sentences

Total interest expense

6,596 9,880 20,987 33,499

Net interest income

4 unchanged sentences

Noninterest income:

Gain/(loss) on sale of investments ( 46 ) ( 12 ) ( 172 ) 161

Gain on sale of loans

Loss on sale of investments ( 2 ) ( 21 )

Service charges and fees 13,067 12,394

1 unchanged sentence

Insurance commission income — 2,546

Gain/(loss) on real estate owned, net 247 ( 32 ) 371 ( 220 )

Loss on real estate owned, net ( 29 ) ( 42 )

Income from bank-owned life insurance 1,983 1,736

Mortgage banking income 1,465 6,020

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

Other operating income 2,244 2,836

22 unchanged sentences

See accompanying notes to unaudited Consolidated Financial Statements.

Tabl e of Contents

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

(in thousands)

Quarter ended September 30, Nine months ended September 30,

2021 2020 2021 2020

Quarter ended March 31,

Net income $ 28,287 40,237

Other comprehensive income net of tax:

Net unrealized holding gains/(losses) on marketable securities:

Unrealized holding gains/(losses), net of tax of $ 2,076 , ($ 107 ), $ 6,812 , and ($ 5,286 ), respectively

( 6,455 ) 676 ( 19,554 ) 13,623

Reclassification adjustment for (gains)/losses included in net income, net of tax of $ 24 , $ 1 , $ 89 , and $ 0 , respectively

( 69 ) ( 1 ) ( 280 ) 1

Net unrealized holding gains/(losses) on marketable securities ( 6,524 ) 675 ( 19,834 ) 13,624

Change in fair value of interest rate swaps

Unrealized holding losses on interest rate swaps, net of tax of $ 0 , $ 0 , $ 0 , and $ 209 , respectively

Net unrealized holding losses on marketable securities:

Unrealized holding losses, net of tax of $ 18,877 and $ 5,981 , respectively

( 64,783 ) ( 17,421 )

Reclassification adjustment for losses included in net income, net of tax of $ 0 , ($ 375 ), $ 0 , and ($ 375 ), respectively

Net change in fair value of interest rate swaps — 946 — —

Reclassification adjustment for gains included in net income, net of tax of $ 0 and $ 22 , respectively

Net unrealized holding losses on marketable securities ( 64,784 ) ( 17,496 )

Defined benefit plan:

Actuarial reclassification adjustments for prior period service costs and actuarial losses included in net income, net of tax of ($ 128 ), ($ 99 ), ($ 386 ), and ($ 297 ) respectively

333 250 1,000 748

Other comprehensive income/(loss) ( 6,191 ) 1,871 ( 18,834 ) 14,372

Total comprehensive income $ 28,872 39,921 105,433 54,161

Actuarial reclassification adjustments for prior period service costs and actuarial (gains)/losses included in net income, net of tax of $ 50 and ($ 129 ), respectively

Other comprehensive loss ( 64,915 ) ( 17,163 )

Total comprehensive (loss)/income $ ( 36,628 ) 23,074

See accompanying notes to unaudited Consolidated Financial Statements.

Tabl e of Contents

NORTHWEST BANCSHARES, INC.

4 unchanged sentences

other comprehensive loss Total shareholders’ equity

Quarter ended September 30, 2021 Shares Amount

Beginning balance at June 30, 2021 127,907,885 $ 1,279 1,025,174 595,100 ( 46,192 ) 1,575,361

Quarter ended March 31, 2022 Shares Amount

Beginning balance at December 31, 2021 126,612,183 $ 1,266 1,010,405 609,529 ( 37,629 ) 1,583,571

Comprehensive income:

5 unchanged sentences

Stock-based compensation expense 10,222 — 699 — — 699

Share repurchases ( 1,425,120 ) ( 14 ) ( 18,809 ) — — ( 18,823 )

Stock-based compensation forfeited ( 37,645 ) — — — — —

1 unchanged sentence

— — — ( 25,335 ) — ( 25,335 )

Ending balance at September 30, 2021 126,521,344 $ 1,265 1,008,099 604,787 ( 52,383 ) 1,561,768

Ending balance at March 31, 2022 126,686,373 $ 1,267 1,012,308 612,481 ( 102,544 ) 1,523,512

Additional paid-in capital Retained earnings Accumulated

other comprehensive income/(loss) Total shareholders’ equity

Quarter ended September 30, 2020 Shares Amount

Beginning balance at June 30, 2020 127,838,400 $ 1,278 1,023,083 530,928 ( 24,440 ) 1,530,849

Comprehensive income:

Net income — — — 38,050 — 38,050

Other comprehensive income, net of tax of ($ 581 )

— — — — 1,871 1,871

Total comprehensive income — — — 38,050 1,871 39,921

Stock-based compensation expense — — 743 — — 743

Stock-based compensation forfeited ( 37,103 ) — 1 — — 1

Dividends paid ($ 0.19 per share)

— — — ( 24,283 ) — ( 24,283 )

Ending balance at September 30, 2020 127,801,297 $ 1,278 1,023,827 544,695 ( 22,569 ) 1,547,231

See accompanying notes to unaudited Consolidated Financial Statements.

Tabl e of Contents

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

(in thousands, expect share data)

Additional paid-in capital Retained earnings Accumulated

other comprehensive loss Total shareholders’ equity

Nine months ended September 30, 2021 Shares Amount

Quarter ended March 31, 2021 Shares Amount

Beginning balance at December 31, 2020 127,019,452 $ 1,270 1,015,502 555,480 ( 33,549 ) 1,538,703

10 unchanged sentences

— — — ( 24,105 ) — ( 24,105 )

Ending balance at September 30, 2021 126,521,344 $ 1,265 1,008,099 604,787 ( 52,383 ) 1,561,768

Additional paid-in capital Retained earnings Accumulated

other comprehensive income/(loss) Total shareholders’ equity

Nine months ended September 30, 2020 Shares Amount

Beginning balance at December 31, 2019 106,859,088 $ 1,069 805,750 583,407 ( 36,941 ) 1,353,285

Comprehensive income:

Net income — — — 39,789 — 39,789

Other comprehensive income, net of tax of ($ 5,749 )

— — — — 14,372 14,372

Total comprehensive income — — — 39,789 14,372 54,161

Acquisition of MutualBank 20,658,957 206 213,200 — — 213,406

Reclassification due to adoption of ASU No.

2016-13 — — — ( 9,649 ) — ( 9,649 )

Exercise of stock options 87,305 1 1,005 — — 1,006

Stock-based compensation expense 282,691 3 3,766 — — 3,769

Stock-based compensation forfeited ( 86,744 ) ( 1 ) 1 — — —

Other — — 105 — — 105

Dividends paid ($ 0.57 per share)

— — — ( 68,852 ) — ( 68,852 )

Ending balance at September 30, 2020 127,801,297 $ 1,278 1,023,827 544,695 ( 22,569 ) 1,547,231

Ending balance at March 31, 2021 127,222,648 $ 1,272 1,018,822 571,612 ( 50,712 ) 1,540,994

See accompanying notes to unaudited Consolidated Financial Statements.

Tabl e of Contents

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

(in thousands)

Nine months ended September 30,

Quarter ended March 31,

Operating activities:

Net income $ 28,287 40,237

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by/(used in) operating activities:

Provision for credit losses ( 1,481 ) ( 5,620 )

Net gain on sale of assets ( 970 ) ( 2,322 )

Net loss/(gain) on sale of assets 780 ( 262 )

Mortgage banking activity 677 ( 8,429 )

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

Net depreciation, amortization and accretion 3,595 6,514

(Increase)/decrease in other assets ( 30,666 ) 33,746

Increase/(decrease) in other liabilities ( 10,545 ) 79,299

Decrease in other liabilities ( 31,625 ) ( 21,034 )

Net amortization on marketable securities 1,505 2,154

1 unchanged sentence

Noncash write-down of real estate owned 29 123

Deferred income tax (benefit)/expense 1,889 ( 15,812 )

Origination of loans held-for-sale ( 104,535 ) ( 240,765 )

Proceeds from sale of loans held-for-sale 110,278 260,394

Net cash provided by operating activities 137,547 153,810

Net cash (used in)/provided by operating activities ( 22,457 ) 68,019

Investing activities:

6 unchanged sentences

Loan originations ( 901,499 ) ( 975,141 )

Loan purchases ( 210,775 ) —

Proceeds from loan maturities and principal reductions 985,218 1,169,026

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

Net proceeds of FHLB stock 7,181 4,684

Net proceeds/(redemptions) of FHLB stock 866 ( 113 )

Proceeds from sale of real estate owned — 479

Proceeds from sale of real estate owned for investment, net 76 76

Purchase of premises and equipment ( 3,728 ) ( 10,808 )

Proceeds from the sale of insurance business 28,238 —

Acquisitions, net of cash received — 261,712

Disposals/(purchases) of premises and equipment, net 329 ( 285 )

Net cash used in investing activities ( 72,684 ) ( 286,448 )

Tabl e of Contents

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

(in thousands)

Nine months ended September 30,

Three months ended March 31,

Financing activities:

Net increase in deposits $ 19,235 513,861

Proceeds from long-term borrowings — 123,247

Repayments of long-term borrowings — ( 20,000 )

Net decrease in short-term borrowings ( 17,657 ) ( 9,469 )

Increase in advances by borrowers for taxes and insurance ( 18,279 ) ( 16,790 )

Decrease in advances by borrowers for taxes and insurance ( 560 ) ( 1,206 )

Cash dividends paid on common stock ( 25,335 ) ( 24,105 )

1 unchanged sentence

Proceeds from stock options exercised 1,205 6,927

Net cash provided by financing activities 485,338 1,084,427

Net increase in cash and cash equivalents $ 354,208 595,903

Net cash (used in)/provided by financing activities ( 23,112 ) 461,442

Net (decrease)/increase in cash and cash equivalents $ ( 118,253 ) 243,013

Cash and cash equivalents at beginning of period $ 1,279,259 736,277

Net increase in cash and cash equivalents 354,208 595,903

Net (decrease)/increase in cash and cash equivalents ( 118,253 ) 243,013

Cash and cash equivalents at end of period $ 1,161,006 979,290

3 unchanged sentences

Income taxes 84 —

Business acquisitions:

Fair value of assets acquired $ — 2,090,599

Northwest Bancshares, Inc.

common stock issued — ( 213,406 )

Net cash paid — —

Liabilities assumed $ — 1,877,193

Non-cash activities:

2 unchanged sentences

See accompanying notes to unaudited Consolidated Financial Statements.

Tabl e of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1 unchanged sentence

Northwest Bancshares, Inc.

(the “Company” or “NWBI”), a Maryland corporation headquartered in Warren, Pennsylvania, is a bank holding company regulated by the Board of Governors of the Federal Reserve System ("FRB").

(the “Company” or “NWBI”), a Maryland corporation headquartered in Columbus, Ohio, is a bank holding company regulated by the Board of Governors of the Federal Reserve System (“FRB”).

The primary activity of the Company is the ownership of all of the issued and outstanding common stock of Northwest Bank, a Pennsylvania-chartered savings bank (“Northwest”).

1 unchanged sentence

Northwest operates 170 community-banking offices throughout Pennsylvania, Western New York, Eastern Ohio, and Indiana.

The accompanying unaudited Consolidated Financial Statements include the accounts of the Company and its subsidiary, Northwest, and Northwest’s subsidiaries Northwest Capital Group, Inc., Allegheny Services, Inc., Great Northwest Corporation, The Bert Company (doing business as Northwest Insurance Services, which was sold April 30, 2021) and MutualFirst Investment Company, Inc.

The unaudited Consolidated Financial Statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X.

3 unchanged sentences

Certain items previously reported have been reclassified to conform to the current year’s reporting format.

The results of operations for the quarter and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021, or any other period.

The results of operations for the quarter ended are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or any other period.

Stock-Based Compensation

On May 25, 2021, the Company awarded employees 621,972 stock options and directors 72,000 stock options with an exercise price of $ 13.68 and grant date fair value of $ 0.64 per stock option, and the Company awarded employees 293,755 restricted common shares and directors 27,000 restricted common shares with a grant date fair value of $ 13.68 .

Awarded stock options and common shares vest over a five-year period with the first vesting occurring on the grant date.

Stock-based compensation expense of $ 1.0 million and $ 743,000 for the quarters ended September 30, 2021 and 2020, respectively, was recognized in compensation expense relating to our stock benefit plans.

At September 30, 2021, there was compensation expense of $ 1.9 million to be recognized for awarded but unvested stock options and $ 10.7 million for unvested restricted common shares.

Stock-based compensation expense of $ 699,000 and $ 961,000 for the quarters ended March 31, 2022 and 2021, respectively, was recognized in compensation expense relating to our stock benefit plans.

At March 31, 2022, there was compensation expense of $ 1.3 million to be recognized for awarded but unvested stock options and $ 7.5 million for unvested restricted common shares.

Income Taxes-Uncertain Tax Positions

2 unchanged sentences

The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information.

At September 30, 2021, we had $ 336,000 of liability for unrecognized tax benefits.

At March 31, 2022, we had $ 241,000 of liability for unrecognized tax benefits.

We recognize interest accrued related to:

2 unchanged sentences

We are subject to audit by the Internal Revenue Service and any state in which we conduct business for the tax periods ended December 31, 2021, 2020, 2019 and 2018.

Recently Adopted Accounting Standards

In August 2018, the Financial Accounting Standards Board ("FASB") issued the accounting standard update ("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 8, "Pension and Other Post-Retirement Benefits".

Tabl e of Contents

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

(2) Marketable Securities

The following table shows the portfolio of marketable securities available-for-sale at September 30, 2021 (in thousands):

The following table shows the portfolio of marketable securities available-for-sale at March 31, 2022 (in thousands):

Debt issued by the U.S government and agencies:

Due in one year through five years $ 20,000 — ( 738 ) 19,262

Due after ten years 56,586 — ( 5,196 ) 51,390

Debt issued by government-sponsored enterprises:

Due in less than one year 191 1 — 192

Due in one year through five years 992 13 — 1,005

Due in five years through ten years 46,172 1 ( 4,313 ) 41,860

11 unchanged sentences

Total marketable securities available-for-sale $ 1,542,170 1,015 ( 101,087 ) 1,442,098

Tabl e of Contents

The following table shows the portfolio of marketable securities available-for-sale at December 31, 2021 (in thousands):

1 unchanged sentence

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

15 unchanged sentences

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

The following table shows the portfolio of marketable securities held-to-maturity at September 30, 2021 (in thousands):

Debt issued by government-sponsored enterprises:

The following table shows the portfolio of marketable securities held-to-maturity at March 31, 2022 (in thousands):

Debt issued by the U.S.

government and agencies:

Due in one year through five years $ 16,478 — ( 968 ) 15,510

7 unchanged sentences

Total marketable securities held-to-maturity $ 737,730 54 ( 60,408 ) 677,376

Tabl e of Contents

The following table shows the portfolio of marketable securities held-to-maturity at December 31, 2021 (in thousands):

Debt issued by government-sponsored enterprises:

Debt issued by the U.S.

government and agencies:

Due in one 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

The following table shows the contractual maturity of our residential mortgage-backed securities available-for-sale at September 30, 2021 (in thousands):

The following table shows the contractual maturity of our residential mortgage-backed securities available-for-sale at March 31, 2022 (in thousands):

Residential mortgage-backed securities:

4 unchanged sentences

Total residential mortgage-backed securities $ 1,295,825 1,213,581

The following table shows the contractual maturity of our residential mortgage-backed securities held-to-maturity at September 30, 2021 (in thousands):

The following table shows the contractual maturity of our residential mortgage-backed securities held-to-maturity at March 31, 2022 (in thousands):

Residential mortgage-backed securities:

3 unchanged sentences

Total residential mortgage-backed securities $ 613,278 565,267

The following table shows the fair value of and gross unrealized losses on marketable 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 September 30, 2021 (in thousands):

Less than 12 months 12 months or more Total

6 unchanged sentences

Total $ 1,352,389 ( 91,948 ) 682,956 ( 69,547 ) 2,035,345 ( 161,495 )

Tabl e of Contents

7 unchanged sentences

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

The Company does not believe that the available-for-sale debt securities that were in an unrealized loss position as of September 30, 2021, which were comprised of 216 individual securities, represents a credit loss impairment.

The Company does not believe that the available-for-sale debt securities that were in an unrealized loss position as of March 31, 2022, which were comprised of 494 individual securities, represents a credit loss impairment.

All of these securities were issued by U.S.

government agencies, U.S.

government-sponsored enterprises or local municipalities.

The securities issued by the U.S.

government agencies or U.S.

government-sponsored enterprises.

There securities are either explicitly or implicitly guaranteed by the U.S.

government-sponsored enterprises are either explicitly or implicitly guaranteed by the U.S.

government, are highly rated by major rating agencies and have a long history of no credit losses.

The securities issued by local municipalities were all highly rated by major rating agencies and have no history of credit losses.

The unrealized losses were primarily attributable to changes in the interest rate environment and not due to the credit quality of these investment securities.

3 unchanged sentences

government-sponsored enterprises.

There securities are either explicitly or implicitly guaranteed by the U.S.

These securities are either explicitly or implicitly guaranteed by the U.S.

government, are highly rated by major rating agencies and have a long history of no credit losses.

Therefore, the Company did not record an allowance for credit losses for these securities as of September 30, 2021.

The following table presents the credit quality of our held-to-maturity securities, based on the latest information available as of September 30, 2021 (in thousands).

Therefore, the Company did not record an allowance for credit losses for these securities as of March 31, 2022.

The following table presents the credit quality of our held-to-maturity securities, based on the latest information available as of March 31, 2022 (in thousands).

The credit ratings are sourced from nationally recognized rating agencies, which include Moody’s and S&P, or when credit ratings cannot be sourced from the agencies, they are presented based on asset type.

All of our held-to-maturity securities were current in their payment of principal and interest as of September 30, 2021.

All of our held-to-maturity securities were current in their payment of principal and interest as of March 31, 2022.

Held-to-maturity securities (at amortized cost):

Debt issued by government-sponsored enterprises $ 124,450 124,450

Debt issued by the U.S.

government-sponsored enterprises $ 124,452 124,452

Residential mortgage-backed securities 613,278 613,278

Total marketable securities held-to-maturity $ 737,730 737,730

Tabl e of Contents

(3) Loans Receivable

The following table shows a summary of our loans receivable at amortized cost basis at September 30, 2021 and December 31, 2020 (in thousands):

September 30, 2021 December 31, 2020

The following table shows a summary of our loans receivable at amortized cost basis at March 31, 2022 and December 31, 2021 (in thousands):

March 31, 2022 December 31, 2021

Originated (1) Acquired (2) Total Originated (1) Acquired (2) Total

13 unchanged sentences

Total loans receivable, net (4) $ 9,013,360 1,026,379 10,039,739 8,785,275 1,128,876 9,914,151

(1) Includes fair value of $ 27.4 million and $ 58.8 million of loans held-for-sale at September 30, 2021 and December 31, 2020, respectively.

(2) Includes $ 57.6 million and $ 40.9 million of net unearned income, unamortized premiums and discounts and deferred fees and costs at September 30, 2021 and December 31, 2020, respectively.

Tabl e of Contents

The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the quarter ended September 30, 2021 (in thousands):

Balance as of September 30, 2021 Current period provision Charge-offs Recoveries Balance as of June 30, 2021

Allowance for Credit Losses

Personal Banking:

Residential mortgage loans $ 7,987 1,939 ( 1,263 ) 64 7,247

Home equity loans 6,293 291 ( 1,474 ) 237 7,239

Vehicle loans 12,457 82 ( 1,112 ) 599 12,888

Consumer loans 3,074 949 ( 1,036 ) 360 2,801

Total Personal Banking 29,811 3,261 ( 4,885 ) 1,260 30,175

Commercial Banking:

Commercial real estate loans 58,451 ( 5,103 ) ( 1,581 ) 555 64,580

Commercial real estate loans - owner occupied 3,246 ( 1,487 ) — 4 4,729

Commercial loans 18,259 ( 1,025 ) ( 412 ) 1,850 17,846

Total Commercial Banking 79,956 ( 7,615 ) ( 1,993 ) 2,409 87,155

Total $ 109,767 ( 4,354 ) ( 6,878 ) 3,669 117,330

Allowance for Credit Losses - off-balance sheet exposure

Personal Banking:

Residential mortgage loans $ 2 — — — 2

Home equity loans 40 ( 2 ) — — 42

Total Personal Banking 42 ( 2 ) — — 44

Commercial Banking:

Commercial real estate loans 2,647 715 — — 1,932

Commercial real estate loans - owner occupied 140 ( 41 ) — — 181

Commercial loans 1,333 101 — — 1,232

Total Commercial Banking 4,120 775 — — 3,345

Total off-balance sheet exposure $ 4,162 773 — — 3,389

Tabl e of Contents

The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the quarter ended September 30, 2020, and includes the cumulative effect of adopting ASU 2016-13 (in thousands):

Balance as of September 30, 2020 Current period provision Charge-offs Recoveries Balance as of June 30, 2020

(1) Includes originated and purchased loan pools.

(2) Includes loans subject to purchase accounting.

(3) Includes fair value of $ 19.3 million and $ 25.1 million of loans held-for-sale at March 31, 2022 and December 31, 2021, respectively.

(4) Includes $ 63.1 million and $ 62.8 million of net unearned income, unamortized premiums and discounts and deferred fees and costs at March 31, 2022 and December 31, 2021, respectively.

The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the quarter ended March 31, 2022 (in thousands):

Balance as of March 31, 2022 Current period provision Charge-offs Recoveries Balance as of December 31, 2021

Allowance for Credit Losses

22 unchanged sentences

Total off-balance sheet exposure $ 4,054 1,596 — — 2,458

Tabl e of Contents

The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the nine months ended September 30, 2021 (in thousands):

Balance as of September 30, 2021 Current period provision Charge-offs Recoveries Balance as of December 31, 2020

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

Balance as of March 31, 2021 Current period provision Charge-offs Recoveries Balance as of December 31, 2020

Allowance for Credit Losses

22 unchanged sentences

Total off-balance sheet exposure $ 4,619 ( 1,744 ) — — 6,363

Tabl e of Contents

Balance as of September 30, 2020 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

Allowance for Credit Losses

Personal Banking:

Residential mortgage loans $ 12,036 1,132 ( 510 ) 304 1,095 7,441 2,574

Home equity loans 9,585 536 ( 550 ) 408 216 5,786 3,189

Vehicle loans 16,713 12,419 ( 5,369 ) 1,294 235 842 7,292

Consumer loans 3,147 3,600 ( 4,666 ) 1,179 157 ( 2,424 ) 5,301

Total Personal Banking 41,481 17,687 ( 11,095 ) 3,185 1,703 11,645 18,356

Commercial Banking:

Commercial real estate loans 73,410 50,018 ( 1,470 ) 1,011 5,720 2,288 15,843

Commercial real estate loans - owner occupied 13,570 5,642 ( 83 ) 25 963 1,278 5,745

Commercial loans 11,748 12,858 ( 16,056 ) 909 459 ( 4,419 ) 17,997

Total Commercial Banking 98,728 68,518 ( 17,609 ) 1,945 7,142 ( 853 ) 39,585

Total $ 140,209 86,205 ( 28,704 ) 5,130 8,845 10,792 57,941

Allowance for Credit Losses -

off-balance sheet exposure

Personal Banking:

Residential mortgage loans $ 3 3 — — — — —

Home equity loans 40 10 — — — ( 293 ) 323

Consumer loans — — — — — ( 402 ) 402

Total Personal Banking 43 13 — — — ( 695 ) 725

Commercial Banking:

Commercial real estate loans 2,423 412 — — — 1,934 77

Commercial real estate loans - owner occupied 469 378 — — — 88 3

Commercial loans 3,312 2,220 — — — 923 169

Total Commercial Banking 6,204 3,010 — — — 2,945 249

Total off-balance sheet exposure $ 6,247 3,023 — — — 2,250 974

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

During the nine months ended September 30, 2021, there were no loans sold that were classified as held for investment.

During the nine months ended September 30, 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.

No loans were sold during the three months ended September 30, 2021 or September 30, 2020.

Tabl e of Contents

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at September 30, 2021 (in thousands):

During the quarter ended March 31, 2022, the Company purchased a $ 72.7 million small business equipment finance loan pool and a $ 138.1 million one- to four-family jumbo mortgage loan pool.

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at March 31, 2022 (in thousands):

receivable Allowance for

35 unchanged sentences

(1) Includes $ 17.2 million of nonaccrual TDRs.

Tabl e of Contents

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 September 30, 2021 and December 31, 2020 (in thousands):

Nonaccrual loans at December 31, 2020 Nonaccrual loans at September 30, 2021 with an allowance Nonaccrual loans at September 30, 2021 with no allowance Loans at September 30, 2021 90 days past due and accruing

The following table presents the amortized cost of our loans on nonaccrual status as of the beginning and end of the quarter ended March 31, 2022 (in thousands):

March 31, 2022

Nonaccrual loans at January 1, 2022 Nonaccrual loans with an allowance Nonaccrual loans with no allowance Total nonaccrual loans at the end of the period Loans 90 days past due and accruing

Personal Banking:

10 unchanged sentences

Total $ 158,471 35,368 88,793 124,161 420

During the three and nine months ended September 30, 2021, we recognized $ 138,000 and $ 664,000 of interest income on nonaccrual and troubled debt restructuring loans.

The following table presents the amortized cost of our loans on nonaccrual status as of the year ended December 31, 2020 and December 21, 2019 (in thousands):

Nonaccrual loans at December 31, 2019 Nonaccrual loans at December 31, 2020

with an allowance

Nonaccrual loans at December 31, 2020 with no allowance

Loans at December 31, 2020 90 days past due and accruing

During the quarter ended March 31, 2022, we recognized $ 153,000 of interest income on nonaccrual and troubled debt restructuring loans.

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

December 31, 2021

Nonaccrual loans at January 1, 2021 Nonaccrual loans with an allowance Nonaccrual loans with no allowance Total nonaccrual loans at the end of the period Loans 90 days past due and accruing

Personal Banking:

11 unchanged sentences

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

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The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of September 30, 2021 (in thousands):

Real estate Equipment Other Total

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of March 31, 2022 (in thousands):

Real estate Equipment Total

Personal Banking:

8 unchanged sentences

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

Real estate Equipment Total

Personal Banking:

7 unchanged sentences

Total $ 124,477 3,631 128,108

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Our loan portfolios include loans that have been modified in a TDR, where concessions have been granted to borrowers who have experienced financial difficulties.

16 unchanged sentences

Under the CAA, such relief will continue until the earlier of 60 days after the date the COVID-19 national emergency comes to an end or January 1, 2022.

Certain loan modifications made during the year were done in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus .

Accordingly, these loans and leases were not categorized as TDRs.

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The following table provides a roll forward of troubled debt restructurings for the periods indicated (dollars in thousands):

For the quarter ended September 30,

Certain loan modifications made during the prior year were done in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus.

Accordingly, these loans were not categorized as TDRs.

ollowing table provides a roll forward of troubled debt restructurings for the periods indicated (dollars in thousands):

For the quarter ended March 31,

contracts Amount Number of

5 unchanged sentences

Net paydowns — ( 1,030 ) — ( 2,488 )

Home equity loans 1 ( 29 ) — —

Commercial real estate loans 2 ( 53 ) — —

Commercial real estate loans - owner occupied 1 ( 105 ) — —

Commercial loans 5 ( 139 ) — —

Paid-off loans:

Residential mortgage loans 1 ( 3 ) — —

Home equity loans 4 ( 122 ) — —

Commercial real estate loans 4 ( 287 ) — —

Commercial loans — — 1 ( 1 )

Ending TDR balance:

139 $ 26,522 173 $ 34,804

Accruing TDRs $ 13,664 $ 17,684

Nonaccrual TDRs 12,858 17,120

For the nine months ended September 30,

contracts Amount Number of

contracts Amount

Beginning TDR balance:

170 $ 32,135 176 $ 31,999

New TDRs 5 2,608 10 889

Re-modified TDRs 8 5,701 5 9,720

Net paydowns — ( 8,713 ) — ( 7,192 )

Home equity loans 1 ( 29 ) 1 ( 10 )

Commercial real estate loans 2 ( 53 ) — —

Commercial real estate loans - owner occupied 1 ( 105 ) — —

Commercial loans 5 ( 139 ) — —

Paid-off loans:

8 unchanged sentences

Nonaccrual TDRs 16,015 7,390

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The following table provides information related to TDRs (including re-modified TDRs) by portfolio segment and by class of financing receivable during the periods indicated (in thousands):

For the quarter ended September 30, 2021 For the nine months ended September 30, 2021

contracts Recorded

at the time of

modification Current

investment Current

allowance Number of

For the quarter ended March 31, 2022

contracts Recorded

2 unchanged sentences

investment Current

Personal Banking:

Residential mortgage loans — $ — — — 1 $ 125 115 16

Home equity loans 2 153 36 17 3 156 36 17

Total Personal Banking 2 153 36 17 4 281 151 33

Commercial Banking:

Commercial real estate loans 1 $ 330 202 11

Commercial loans 1 330 309 — 3 2,726 2,572 —

Total Commercial Banking 1 330 202 11

Total 1 $ 330 202 11

For the quarter ended September 30, 2020 For the nine months ended September 30, 2020

Number of contracts Recorded

at the time of

modification Current

investment Current

allowance Number of

For the quarter ended March 31, 2021

contracts Recorded

8 unchanged sentences

Commercial real estate loans 2 812 803 130

Commercial real estate loans - owner occupied — — — — 1 58 51 10

Commercial loans 4 444 353 — 5 2,944 2,354 2

Total Commercial Banking 2 812 803 130

Total 4 $ 936 922 140

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The following table provides information as of September 30, 2021 for TDRs (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable for modifications during the quarter ended September 30, 2021 (in thousands):

Type of modification

Number of contracts Rate Payment Maturity date Other Total

Personal Banking:

Home equity loans 2 $ — 30 6 — 36

Total Personal Banking 2 — 30 6 — 36

Commercial Banking:

Commercial real estate loans 3 378 — 4,112 — 4,490

Commercial loans 1 — — 309 — 309

Total Commercial Banking 4 378 — 4,421 — 4,799

Total 6 $ 378 30 4,427 — 4,835

The following table provides information as of September 30, 2020 for TDRs (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable for modifications during the quarter ended September 30, 2020 (in thousands):

Type of modification

Number of contracts Rate Payment Maturity date Other Total

Personal Banking:

Residential mortgage loans 1 $ — — 89 — 89

Total Personal Banking 1 — — 89 — 89

Commercial Banking:

Commercial real estate loans 5 — — 6,755 285 7,040

Commercial loans 4 — 114 239 — 353

Total Commercial Banking 9 — 114 6,994 285 7,393

Total 10 $ — 114 7,083 285 7,482

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The following table provides information as of March 31, 2022 for TDRs (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable for modifications during the quarter ended March 31, 2022 (in thousands):

Type of modification

Number of contracts Rate Payment Maturity date Other Total

Personal Banking:

Residential mortgage loans 1 $ 115 — — — 115

Home equity loans 3 — 30 6 — 36

Total Personal Banking 4 115 30 6 — 151

Commercial Banking:

Commercial real estate loans 1 $ — — 202 — 202

Commercial loans 3 — — 2,572 — 2,572

Total Commercial Banking 1 — — 202 — 202

Total 1 $ — — 202 — 202

The following table provides information as of March 31, 2021 for TDRs (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable for modifications during the quarter ended March 31, 2021 (in thousands):

Type of modification

6 unchanged sentences

Commercial real estate loans 2 — — 729 74 803

Commercial real estate loans - owner occupied 1 — — 51 — 51

Commercial loans 5 — 114 239 2,001 2,354

Total Commercial Banking 2 — — 729 74 803

Total 4 $ 117 — 731 74 922

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

of September 30, 2021 that subsequently defaulted:

Number of contracts Recorded

The following table provides information related to troubled debt restructurings modified within the previous twelve months of March 31, 2022 that subsequently defaulted:

contracts Recorded

at the time of

5 unchanged sentences

Total 1 $ 4,167 3,823 —

No TDRs modified within the previous twelve months of September 30, 2020 subsequently defaulted.

The following table provides information related to the amortized cost basis of loan payment delinquencies at September 30, 2021 (in thousands):

No TDRs modified within the previous twelve months of March 31, 2021 subsequently defaulted.

The following table provides information related to the amortized cost basis of loan payment delinquencies at March 31, 2022 (in thousands):

delinquent 60-89 days

38 unchanged sentences

Total originated loans $ 47,514 9,884 39,471 96,869 9,919,523 10,016,392 331

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Credit Quality Indicators:

For Commercial Banking loans we categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as:

For Commercial Banking we categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as:

current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.

9 unchanged sentences

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.

Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.

Loans so classified have a well-defined weakness or weaknesses that jeopardize the

liquidation of the debt.

They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.

9 unchanged sentences

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 required 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 required 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.

These loans are generally charged-off in the month in which the 180 day period elapses.

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The following table presents the amortized cost basis of our loan portfolio by year of origination and credit quality indicator for each portfolio segment as of September 30, 2021 (in thousands):

YTD September 30, 2021 2020 2019 2018 2017 Prior Revolving loans Revolving loans converted to term loans Total loans

The following table presents the amortized cost basis of our loan portfolio by year of origination and credit quality indicator for each portfolio segment as of March 31, 2022 (in thousands):

YTD March 31, 2022 2021 2020 2019 2018 Prior Revolving loans Revolving loans converted to term loans Total loans

Personal Banking:

34 unchanged sentences

Total loans $ 596,826 2,348,964 1,700,317 1,164,008 707,517 2,767,274 773,603 80,525 10,139,034

For the nine months ended September 30, 2021, $ 23.0 million of revolving loans were converted to term loans.

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For the quarter ended March 31, 2022, $ 5.1 million of revolving loans were converted to term loans.

The following table presents the amortized cost basis of our loan portfolio by year of origination and credit quality indicator for each portfolio segment as of December 31, 2021 (in thousands):

24 unchanged sentences

Total commercial real estate loans 307,492 469,180 432,766 312,865 278,921 781,377 27,509 15,371 2,625,481

Commercial real estate loans - owner occupied

Commercial real estate - owner occupied

Pass 69,084 19,452 51,997 60,824 57,676 94,687 2,822 2,707 359,249

1 unchanged sentence

Substandard — — 3,575 2,887 7,840 10,602 — 822 25,726

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

Total commercial real estate - owner occupied loans 69,084 19,452 55,572 64,480 67,475 106,733 3,678 3,529 390,003

Commercial loans

6 unchanged sentences

For the year ended December 31, 2021, $ 27.3 million of revolving loans were converted to term loans.

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(4) Goodwill and Other Intangible Assets

The following table provides information for intangible assets subject to amortization at the dates indicated (in thousands):

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Amortizable intangible assets:

8 unchanged sentences

Total intangible assets - net $ 11,654 12,836

The following table shows the actual aggregate amortization expense for the quarters ended September 30, 2021 and 2020, as well as the estimated aggregate amortization expense, based upon current levels of intangible assets, for the current fiscal year and each of the five succeeding fiscal years (in thousands):

For the quarter ended September 30, 2021 $ 1,321

For the quarter ended September 30, 2020 1,781

For the nine months ended September 30, 2021 4,348

For the nine months ended September 30, 2020 5,192

The following table shows the actual aggregate amortization expense for the quarters ended March 31, 2022 and 2021, as well as the estimated aggregate amortization expense, based upon current levels of intangible assets, for the current fiscal year and each of the five succeeding fiscal years (in thousands):

For the quarter ended March 31, 2022 $ 1,183

For the quarter ended March 31, 2021 1,594

For the year ending December 31, 2022 4,277

6 unchanged sentences

Balance at December 31, 2020 $ 382,279

Goodwill acquired 36,176

Balance at December 31, 2020 382,279

Purchase accounting adjustment 77

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

Balance at September 30, 2021 $ 380,997

Balance at December 31, 2021 380,997

Balance at March 31, 2022 $ 380,997

We performed our annual goodwill impairment test as of June 30, 2021 in accordance with ASC 350, as updated by ASU 2017-04 (“Step 0”), and concluded that goodwill was not impaired.

As of September 30, 2021, 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 of goodwill.

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As of March 31, 2022, 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 of goodwill.

(5) Borrowed Funds

(a) Borrowings

September 30, 2021

Amount Average rate

Borrowed funds at March 31, 2022 and December 31, 2021 are presented in the following table:

March 31, 2022 December 31, 2021

Amount Average rate Amount Average rate

Collateralized borrowings, due within one year $ 121,436 0.19 % $ 139,093 0.19 %

2 unchanged sentences

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

During the year ended September 30, 2021, $ 2.0 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 September 30, 2021 and December 31, 2020.

At September 30, 2021 and December 31, 2020, collateralized borrowings due within one year were $ 126.5 million and $ 137.7 million, respectively.

The revolving line of credit had no balance as of March 31, 2022 and December 31, 2021.

At March 31, 2022 and December 31, 2021, collateralized borrowings due within one year were $ 121.4 million and $ 139.1 million, respectively.

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

2 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 September 30, 2021 and December 31, 2020, subordinated debentures, net of issuance costs, were $ 123.5 million and $ 123.3 million, respectively.

At March 31, 2022 and December 31, 2021, subordinated debentures, net of issuance costs, were $ 123.7 million and $ 123.6 million, respectively.

(b) Trust Preferred Securities

6 unchanged sentences

As the shareholders of the trust preferred securities are the primary beneficiaries of the Trusts, the Trusts are not consolidated in our financial statements.

The following table sets forth a summary of the cumulative trust preferred securities and the junior subordinated debt held by the Trust as of September 30, 2021.

Maturity date Interest rate Capital debt securities September 30, 2021

The following table sets forth a summary of the cumulative trust preferred securities and the junior subordinated debt held by the Trust as of the date listed.

Maturity date Interest rate Capital debt securities March 31, 2022 December 31, 2021

Northwest Bancorp Capital Trust III December 30, 2035 3-month LIBOR plus 1.38 %

3 unchanged sentences

LNB Trust II June 15, 2037 3-month LIBOR plus 1.48 %

7,875 8,119 8,119

UNCT I (1) January 23, 2034 3-month LIBOR plus 2.85 %

8,000 7,956 7,950

UNCT II (1) November 23, 2034 3-month LIBOR plus 2.00 %

3,000 2,748 2,741

MFBC Statutory Trust I (1) September 15, 2035 3-month LIBOR plus 1.70 %

5,000 3,606 3,580

Universal Preferred Trust (1) October 7, 2035 3-month LIBOR plus 1.69 %

5,000 3,596 3,570

$ 129,119 129,054

(1) Net of discounts due to the fair value adjustment made at the time of acquisition.

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Cash distributions on the trust securities are made on a quarterly basis to the extent interest on the debentures is received by the Trusts.

19 unchanged sentences

Collateral may be obtained based on management’s credit assessment of the customer.

At September 30, 2021, the maximum potential amount of future payments we could be required to make under these non-recourse standby letters of credit was $ 47.8 million, of which $ 38.4 million is fully collateralized.

At September 30, 2021, we had a liability which represents deferred income of $ 481,000 related to the standby letters of credit.

At March 31, 2022, the maximum potential amount of future payments we could be required to make under these non-recourse standby letters of credit was $ 45.7 million, of which $ 35.9 million is fully collateralized.

At March 31, 2022, we had a liability which represents deferred income of $ 583,000 related to the standby letters of credit.

(7) Earnings Per Share

2 unchanged sentences

The following table sets forth the computation of basic and diluted EPS (in thousands, except share data and per share amounts):

Quarter ended September 30, Nine months ended September 30,

2021 2020 2021 2020

Quarter ended March 31,

Net income $ 28,287 40,237

6 unchanged sentences

Diluted earnings per share $ 0.22 0.32

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(8) Pension and Other Post-Retirement Benefits

The following table sets forth the net periodic costs for the defined benefit pension plans and post-retirement healthcare plans for the periods indicated (in thousands):

Quarter ended September 30,

Pension benefits Other post-retirement benefits

2021 2020 2021 2020

Service cost $ 2,860 2,097 — —

Interest cost 1,517 1,713 4 7

Expected return on plan assets ( 3,464 ) ( 3,090 ) — —

Amortization of prior service cost ( 580 ) ( 580 ) — —

Amortization of the net loss 1,038 925 3 4

Net periodic cost $ 1,371 1,065 7 11

Nine months ended September 30,

Quarter ended March 31,

Pension benefits Other post-retirement benefits

6 unchanged sentences

Net periodic cost $ 223 1,371 12 8

We anticipate making a contribution to our defined benefit pension plan between $ 4.0 million and $ 8.0 million during the year ending December 31, 2021.

We anticipate making a contribution to our defined benefit pension plan between $ 0 and $ 2.0 million during the year ending December 31, 2022.

(9) Disclosures About Fair Value of Financial Instruments

13 unchanged sentences

◦ Quotes from brokers or other external sources that are not considered binding;

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◦ Quotes from brokers or other external sources where it cannot be determined that market participants would in fact transact for the asset or liability at the quoted price;

4 unchanged sentences

The carrying amounts reported in the Consolidated Statement of Financial Condition approximate fair value for the following financial instruments:

cash and cash equivalents, marketable securities available-for-sale, accrued interest receivable, interest rate lock commitments, forward commitments, interest rate swaps, savings and checking deposits, risk participation agreements and accrued interest payable.

cash and cash equivalents, marketable securities available-for-sale, accrued interest receivable, interest rate lock commitments, forward commitments, interest rate swaps, savings and checking deposits, foreign exchange swaps, risk participation agreements, and accrued interest payable.

Marketable Securities

16 unchanged sentences

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

Loans Held for Investment

The fair value of 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 transferability of FHLB stock, it is not practical to determine the fair value.

2 unchanged sentences

Although market premiums paid for depository institutions reflect an additional value for these low-cost deposits, adjusting fair value for any value expected to be derived from retaining those deposits for a future period of time or from the benefit that results from the ability to fund interest-earning assets with these deposit liabilities is prohibited.

The fair value estimates of deposit liabilities do not include the benefit that results from the low-cost funding provided by these

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deposits compared to the cost of borrowing funds in the market.

The fair value estimates of deposit liabilities do not include the benefit that results from the low-cost funding provided by these deposits compared to the cost of borrowing funds in the market.

Fair values for time deposits are estimated using a discounted cash flow calculation that applies contractual cost currently being offered in the existing portfolio to current market rates being offered locally for deposits of similar remaining maturities.

2 unchanged sentences

Fixed rate advances are valued by comparing their contractual cost to the prevailing market cost.

The carrying amount of collateralized borrowings approximates the fair value.

The carrying amount of repurchase agreements approximates their fair value.

Subordinated Debentures

22 unchanged sentences

Commitments to extend credit are generally short-term in nature and, if drawn upon, are issued under current market terms.

At September 30, 2021 and December 31, 2020, there was no significant unrealized appreciation or depreciation on these financial instruments.

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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 September 30, 2021 (in thousands):

At March 31, 2022 and December 31, 2021, 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 March 31, 2022 (in thousands):

amount Estimated

8 unchanged sentences

Interest rate lock commitments 1,680 1,680 — — 1,680

Forward commitments 518 518 — 518 —

Foreign exchange swaps 1,399 1,399 — 1,399 —

Interest rate swaps not designated as hedging instruments 23,338 23,338 — 23,338 —

7 unchanged sentences

Junior subordinated debentures 129,119 115,159 — — 115,159

Forward commitments 43 43 — 43 —

Foreign exchange swaps 6 6 — 6 —

3 unchanged sentences

Total financial liabilities $ 12,718,631 12,714,163 11,190,504 147,430 1,376,229

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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 (in thousands):

19 unchanged sentences

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 —

3 unchanged sentences

Fair value estimates are made at a point-in-time, based on relevant market data and information about the instrument.

The methods and assumptions detailed above were used in estimating the fair value of financial instruments at both September 30, 2021 and December 31, 2020.

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The following table represents assets and liabilities measured at fair value on a recurring basis at September 30, 2021 (in thousands):

The methods and assumptions detailed above were used in estimating the fair value of financial instruments at both March 31, 2022 and December 31, 2021.

The following table represents assets and liabilities measured at fair value on a recurring basis at March 31, 2022 (in thousands):

Level 1 Level 2 Level 3 Total assets

16 unchanged sentences

Interest rate lock commitments — — 1,680 1,680

Forward commitments — 518 — 518

Foreign exchange swaps — 1,399 — 1,399

Interest rate swaps not designated as hedging instruments — 23,338 — 23,338

Total assets $ — 1,465,436 1,680 1,467,116

Forward commitments $ — 43 — 43

Foreign exchange swaps — 6 — 6

2 unchanged sentences

Total liabilities $ — 23,443 — 23,443

Tabl e of Contents

The following table represents assets and liabilities measured at fair value on a recurring basis at December 31, 2021 (in thousands):

20 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

2 unchanged sentences

The following table presents the changes in Level 3 assets and liabilities measured at fair value on a recurring basis (in thousands):

For the quarter ended September 30, For the nine months ended September 30,

2021 2020 2021 2020

Beginning balance $ 3,608 7,416 6,465 559

Total gains or losses:

Included in net income — — — —

Included in other comprehensive income — — — —

For the quarter ended March 31,

Beginning balance January 1, $ 1,684 6,465

Interest rate lock commitments:

Net activity ( 4 ) ( 1,405 )

Transfers from Level 3 — — — —

Transfers into Level 3 — — — —

Ending balance $ 1,680 5,060

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 mortgage servicing rights.

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The following table represents the fair market measurement for only those nonrecurring assets that had a fair market value below the carrying amount as of September 30, 2021 (in thousands):

The following table represents the fair market measurement for only those nonrecurring assets that had a fair market value below the carrying amount as of March 31, 2022 (in thousands):

Level 1 Level 2 Level 3 Total assets

8 unchanged sentences

Loans individually assessed $ — — 46,968 46,968

Mortgage servicing rights — — 380 380

Real estate owned, net — — 873 873

6 unchanged sentences

We classify real estate owned as nonrecurring Level 3.

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at September 30, 2021 (in thousands):

value Valuation

techniques Significant

unobservable inputs Range

(weighted average)

Fair value Valuation techniques Significant

unobservable inputs Range (weighted average)

Loans individually assessed $ 7,178 Appraisal value (1) Estimated cost to sell 10.0 %

1 unchanged sentence

Mortgage servicing rights 22 Discounted cash flow Annual service cost $ 86

Prepayment rates 7.0 % to 24.6 % ( 11.2 %)

Prepayment rate 7.1 % to 18.3 % ( 9.8 %)

Expected life (months) 47.8 to 102.3 (77.1)

2 unchanged sentences

Real estate owned, net 929 Appraisal value (1) Estimated cost to sell 10.0 %

Loans held for sale 19,272 Quoted prices for similar loans in active markets adjusted by an expected pull-through rate Estimated pull-through rate 100.0 %

(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.

3 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.

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

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from three to five years .

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 to qualify 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 ended September 30, 2020, the Company discontinued these cash flow hedges and, as a result, reclassified a $ 1.3 million loss into earnings.

As of September 30, 2021, the Company had no cash flow hedges.

Derivatives Not Designated as Hedging Instruments

14 unchanged sentences

The risk participation agreements provide credit protection to the financial institution should the borrower fail to perform on its interest rate derivative contract with the financial institution.

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The following table presents information regarding our derivative financial instruments for the periods indicated (in thousands):

1 unchanged sentence

Notional amount Fair value Notional amount Fair value

At September 30, 2021

At March 31, 2022

Derivatives not designated as hedging instruments:

8 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 — —

3 unchanged sentences

The following table presents income or expense recognized on derivatives for the periods indicated (in thousands):

For the quarter ended September 30, For the nine months ended September 30,

2021 2020 2021 2020

Hedging derivatives:

Decrease in interest expense $ — 67 — ( 35 )

For the quarter ended March 31,

Non-hedging swap derivatives:

Increase/(decrease) in other income 590 ( 353 ) 1,087 ( 875 )

Increase in other income $ 61 524

Increase in mortgage banking income 418 2,060

1 unchanged sentence

We establish accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated.

As of September 30, 2021, we do not anticipate that the aggregate ultimate liability arising out of any pending or threatened legal proceedings will be material to our Consolidated Financial Statements.

As of March 31, 2022, we do not anticipate that the aggregate ultimate liability arising out of any pending or threatened legal proceedings will be material to our Consolidated Financial Statements.

Any such accruals are adjusted thereafter as appropriate to reflect changes in circumstances.

2 unchanged sentences

All counterclaims against Northwest were discontinued and, in December 2018, a verdict was rendered in favor of NWIS on several of its claims.

Post-trial proceedings have continued throughout the current year and, due to the inherent uncertainties with respect to these proceedings, we have not accrued any awards associated with this verdict within our Consolidated Financial Statements as of September 30, 2021.

Tabl e of Contents

(12) Changes in Accumulated Other Comprehensive Income

The following tables show the changes in accumulated other comprehensive income by component for the periods indicated (in thousands):

For the quarter ended September 30, 2021

gains/(losses)

For the quarter ended March 31, 2022

on securities

3 unchanged sentences

pension plans Total

Balance as of June 30, 2021 $ 3,533 — ( 49,725 ) ( 46,192 )

Balance as of December 31, 2021 $ ( 12,317 ) — ( 25,312 ) ( 37,629 )

Other comprehensive loss before reclassification adjustments (1) ( 64,783 ) — — ( 64,783 )

Amounts reclassified from accumulated other comprehensive income (2) (3) ( 1 ) — ( 131 ) ( 132 )

Net other comprehensive income/(loss) ( 6,524 ) — 333 ( 6,191 )

Balance as of September 30, 2021 $ ( 2,991 ) — ( 49,392 ) ( 52,383 )

For the quarter ended September 30, 2020

gains/(losses)

on securities

available-for-sale Change in

rate swaps Change in

defined benefit

pension plans Total

Balance as of June 30, 2020 $ 16,096 ( 946 ) ( 39,590 ) ( 24,440 )

Other comprehensive income before reclassification adjustments (4) 676 — — 676

Amounts reclassified from accumulated other comprehensive income (5) (6) (7) ( 1 ) 946 250 1,195

Net other comprehensive income 675 946 250 1,871

Balance as of September 30, 2020 $ 16,771 — ( 39,340 ) ( 22,569 )

(1) Consists of unrealized holding losses, net of tax of ($ 2,076 ).

(2) Consists of realized losses, net of tax of ($ 24 ).

(3) Consists of realized gains, net of tax of $ 128 .

(4) Consists of unrealized holding gains, net of tax $ 107 .

(5) Consists of realized gains on securities, net of tax ($ 1 ).

(6) Consists of realized losses, net of tax of $ 375 .

(7) Consists of realized gains, net of tax of $ 99 .

For the nine months ended September 30, 2021

Net other comprehensive loss ( 64,784 ) — ( 131 ) ( 64,915 )

Balance as of March 31, 2022 $ ( 77,101 ) — ( 25,443 ) ( 102,544 )

For the quarter ended March 31, 2021

gains/(losses)

7 unchanged sentences

Amounts reclassified from accumulated other comprehensive income (5) (6) ( 75 ) — 333 258

Net other comprehensive income/(loss) ( 19,834 ) — 1,000 ( 18,834 )

Balance as of September 30, 2021 $ ( 2,991 ) — ( 49,392 ) ( 52,383 )

Tabl e of Contents

For the nine months ended September 30, 2020

on securities

available-for-sale Change in

rate swaps Change in

defined benefit

pension plans Total

Balance as of December 31, 2019 $ 3,147 — ( 40,088 ) ( 36,941 )

Other comprehensive income/(loss) before reclassification adjustments (4) (5) 13,623 ( 946 ) — 12,677

Amounts reclassified from accumulated other comprehensive income (6) (7) (8) 1 946 748 1,695

Net other comprehensive income 13,624 — 748 14,372

Balance as of September 30, 2020 $ 16,771 — ( 39,340 ) ( 22,569 )

Net other comprehensive (loss)/income ( 17,496 ) — 333 ( 17,163 )

Balance as of March 31, 2021 $ ( 653 ) — ( 50,059 ) ( 50,712 )

(1) Consists of unrealized holding losses, net of tax of $ 18,877 .

(2) Consists of realized losses, net of tax of ($ 89 ).

(2) Consists of realized gains, net of tax of $ 0 .

(4) Consists of unrealized holding gains, net of tax $ 5,286 .

(5) Consists of realized holding losses, net of tax ($ 209 ).

(3) Consists of realized gains, net of tax of $ 50 .

(4) Consists of unrealized holding losses, net of tax $ 5,981 .

(5) Consists of realized gains, net of tax $ 22 .

(6) Consists of realized losses, net of tax of ($ 129 ).

(8) Consists of realized gains, net of tax of $ 297 .

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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-Q

Item 1. Financial Statements