What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-05 compared with 2022-05-06 · 323 added, 119 removed, 1080 unchanged (29% of the section changed)

4 unchanged sentences

(in thousands, except share data)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Cash and cash equivalents $ 504,532 1,279,259

46 unchanged sentences

(in thousands, except share data)

Quarter ended March 31,

Quarter ended June 30, Six months ended June 30,

2022 2021 2022 2021

Interest income:

11 unchanged sentences

Total interest expense

5,631 6,823 11,441 14,391

Net interest income

8 unchanged sentences

Insurance commission income — 1,043 — 3,589

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

Gain on real estate owned, net 291 166 262 124

Income from bank-owned life insurance 2,008 1,639 3,991 3,375

Mortgage banking income 2,157 3,811 3,622 9,831

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

Other operating income 4,861 2,648 7,105 5,484

26 unchanged sentences

(in thousands)

Quarter ended March 31,

Quarter ended June 30, Six months ended June 30,

2022 2021 2022 2021

Net income $ 33,426 48,967 61,713 89,204

Other comprehensive income net of tax:

Net unrealized holding losses on marketable securities:

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

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

Unrealized holding gains/(losses), net of tax of $ 11,973 , ($ 1,245 ), $ 30,850 , and $ 4,736 , respectively

( 39,954 ) 4,322 ( 104,737 ) ( 13,099 )

Reclassification adjustment for gains included in net income, net of tax of $ 0 , $ 43 , $ 0 , and $ 65 , respectively

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

( 1 ) ( 136 ) ( 2 ) ( 211 )

Net unrealized holding gains/(losses) on marketable securities ( 39,955 ) 4,186 ( 104,739 ) ( 13,310 )

Defined benefit plan:

Actuarial reclassification adjustments for prior period service costs and actuarial (gains)/losses included in net income, net of tax of $ 51 , ($ 128 ), $ 101 , and ($ 258 ), respectively

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

( 131 ) 334 ( 262 ) 667

Other comprehensive (loss)/income ( 40,086 ) 4,520 ( 105,001 ) ( 12,643 )

Total comprehensive (loss)/income $ ( 6,660 ) 53,487 ( 43,288 ) 76,561

6 unchanged sentences

other comprehensive loss Total shareholders’ equity

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

Quarter ended June 30, 2022 Shares Amount

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

Comprehensive income:

8 unchanged sentences

— — — ( 25,356 ) — ( 25,356 )

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

Ending balance at June 30, 2022 126,881,766 $ 1,269 1,015,349 620,551 ( 142,630 ) 1,494,539

Additional paid-in capital Retained earnings Accumulated

other comprehensive income/(loss) Total shareholders’ equity

Quarter ended March 31, 2021 Shares Amount

Quarter ended June 30, 2021 Shares Amount

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

Comprehensive income:

Net income — — — 48,967 — 48,967

Other comprehensive income, net of tax of ($ 1,331 )

— — — — 4,520 4,520

Total comprehensive income — — — 48,967 4,520 53,487

Exercise of stock options 418,916 4 5,102 — — 5,106

Stock-based compensation expense 320,755 3 1,715 — — 1,718

Share repurchases ( 34,460 ) — ( 465 ) — — ( 465 )

Stock-based compensation forfeited ( 19,974 ) — — — — —

Dividends paid ($ 0.20 per share)

— — — ( 25,479 ) — ( 25,479 )

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

See accompanying notes to unaudited Consolidated Financial Statements.

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

Six months ended June 30, 2022 Shares Amount

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

6 unchanged sentences

Stock-based compensation expense 75,377 2 2,121 — — 2,123

Share repurchases ( 353,552 ) ( 4 ) ( 4,562 ) — — ( 4,566 )

Stock-based compensation forfeited ( 47,202 ) ( 1 ) 1 — — —

1 unchanged sentence

— — — ( 50,691 ) — ( 50,691 )

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

Ending balance at June 30, 2022 126,881,766 $ 1,269 1,015,349 620,551 ( 142,630 ) 1,494,539

Additional paid-in capital Retained earnings Accumulated

other comprehensive loss Total shareholders’ equity

Six months ended June 30, 2021 Shares Amount

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

Comprehensive income:

Net income — — — 89,204 — 89,204

Other comprehensive loss, net of tax of $ 4,543

— — — — ( 12,643 ) ( 12,643 )

Total comprehensive income/(loss) — — — 89,204 ( 12,643 ) 76,561

Exercise of stock options 986,345 10 12,023 — — 12,033

Stock-based compensation expense 322,685 3 2,676 — — 2,679

Stock-based compensation forfeited ( 32,585 ) — — — — —

Share repurchases ( 388,012 ) ( 4 ) ( 5,027 ) — — ( 5,031 )

Dividends paid ($ 0.39 per share)

— — — ( 49,584 ) — ( 49,584 )

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

See accompanying notes to unaudited Consolidated Financial Statements.

3 unchanged sentences

(in thousands)

Quarter ended March 31,

Six months ended June 30,

Operating activities:

Net income $ 61,713 89,204

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

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

Provision for credit losses 1,148 ( 5,620 )

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

Net gain on sale of assets ( 625 ) ( 570 )

Mortgage banking activity ( 2,660 ) ( 13,818 )

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

Net depreciation, amortization and accretion 2,860 3,058

4 unchanged sentences

Noncash write-down of real estate owned 41 128

Deferred income tax expense 2,256 900

Origination of loans held-for-sale ( 225,091 ) ( 420,530 )

Proceeds from sale of loans held-for-sale 222,662 462,522

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

Net cash provided by operating activities 26,830 105,008

Investing activities:

10 unchanged sentences

Proceeds from sale of real estate owned 424 1,431

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

Proceeds from sale of real estate owned for investment 153 153

Disposals/(purchases) of premises and equipment, net 1,687 ( 1,005 )

Proceeds from the sale of insurance business — 28,238

Net cash used in investing activities ( 512,123 ) ( 415,619 )

3 unchanged sentences

(in thousands)

Three months ended March 31,

Six months ended June 30,

Financing activities:

Net increase in deposits $ 19,235 513,861

Net (decrease)/increase in deposits $ ( 233,910 ) 491,475

Repayments of long-term borrowings ( 10,094 ) ( 22,000 )

Net decrease in short-term borrowings ( 8,603 ) ( 3,785 )

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

Increase in advances by borrowers for taxes and insurance 11,040 8,378

Cash dividends paid on common stock ( 50,691 ) ( 49,584 )

26 unchanged sentences

The Consolidated Financial Statements have been prepared using the accounting policies described in the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 updated, as required, for any new pronouncements or changes.

Allowance for Credit Losses and Provision for Credit Losses Update

During the quarter-ended June 30, 2022, the Bank implemented a new model to calculate the allowance for credit losses on our vehicle loan portfolio.

Additionally, as part of the process we re-assessed our loan segmentation and loans that were previously included in our consumer loan portfolio were moved into our vehicle loan portfolio.

The change in segmentation was driven by underlying collateral types and the loans continue to share similar risk characteristics.

The allowance for credit losses within the vehicle loan portfolio is calculated using a non-discounted cash flow model developed by an external third-party.

Monthly probabilities of default and prepayment are estimated for each loan, along with estimates of exposure at default and loss given default.

The model utilizes loan, borrower, and collateral characteristics, and macroeconomic data as inputs.

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

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.

The results of operations for the quarter ended June 30, 2022 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

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.

On May 18, 2022, the Company awarded employees 150,027 restricted stock units (“RSUs”) with a weighted average discounted grant date fair value of $ 11.00 .

The RSUs vest over a three-year period with the first vesting occurring one year from the grant date.

The Company awarded directors 41,206 restricted stock awards (“RSAs”) with a grant date fair value of $ 12.55 which fully vest one-year from the grant date.

Also, the Company awarded employees 150,027 performance share units (“PSUs”) with a discounted grant date fair value of $ 10.26 .

The number of PSUs earned will be based on attainment of certain performance criteria over a three-year period, with the actual number of shares issuable ranging between 0 % and 150 % of the number of PSUs granted.

The PSUs have a three-year cliff vesting, from the date of grant, and any PSU's earned will be issued after the vesting period.

Stock-based compensation expense of $ 1.4 million and $ 1.7 million for the quarters ended June 30, 2022 and 2021, respectively, was recognized in compensation expense relating to our stock benefit plans.

At June 30, 2022, there was compensation expense of $ 1.1 million to be recognized for awarded but unvested stock options, $ 6.6 million for unvested restricted common shares, $ 1.3 million to be recognized for awarded but unvested RSUs, $ 420,000 to be recognized for awarded but unvested RSAs, and $ 1.3 million to be recognized for awarded but unvested PSUs.

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

We had a $ 241,000 and $ 336,000 liability for unrecognized tax benefits as of June 30, 2022 and 2021, respectively.

We recognize interest accrued related to:

3 unchanged sentences

(2) Marketable Securities

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

The following table shows the portfolio of marketable securities available-for-sale at June 30, 2022 (in thousands):

Debt issued by the U.S government and agencies:

9 unchanged sentences

Due after ten years 95,283 45 ( 13,175 ) 82,153

Corporate debt issues:

Due in five years through ten years 13,564 8 ( 62 ) 13,510

Residential mortgage-backed securities:

26 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 March 31, 2022 (in thousands):

The following table shows the portfolio of marketable securities held-to-maturity at June 30, 2022 (in thousands):

Debt issued by the U.S.

21 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 March 31, 2022 (in thousands):

The following table shows the contractual maturity of our residential mortgage-backed securities available-for-sale at June 30, 2022 (in thousands):

Residential mortgage-backed securities:

4 unchanged sentences

Total residential mortgage-backed securities $ 1,250,461 1,127,840

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

The following table shows the contractual maturity of our residential mortgage-backed securities held-to-maturity at June 30, 2022 (in thousands):

Residential mortgage-backed securities:

3 unchanged sentences

Total residential mortgage-backed securities $ 798,728 727,874

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 March 31, 2022 (in thousands):

Less than 12 months 12 months or more Total

4 unchanged sentences

Municipal securities 101,666 ( 14,055 ) 3,702 ( 779 ) 105,368 ( 14,834 )

Corporate debt issues 6,409 ( 62 ) — — 6,409 ( 62 )

Residential mortgage-backed securities - agency 1,141,928 ( 107,959 ) 560,788 ( 86,077 ) 1,702,716 ( 194,036 )

9 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 March 31, 2022, which were comprised of 494 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 June 30, 2022, which were comprised of 583 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.

government-sponsored enterprises, corporate debt or local municipalities.

The securities issued by the U.S.

2 unchanged sentences

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 corporate debt issues and 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.

5 unchanged sentences

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 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).

Therefore, the Company did not record an allowance for credit losses for these securities as of June 30, 2022.

The following table presents the credit quality of our held-to-maturity securities, based on the latest information available as of June 30, 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 March 31, 2022.

All of our held-to-maturity securities were current in their payment of principal and interest as of June 30, 2022.

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

4 unchanged sentences

(3) Loans Receivable

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

The following table shows a summary of our loans receivable at amortized cost basis at June 30, 2022 and December 31, 2021 (in thousands):

June 30, 2022 December 31, 2021

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

13 unchanged sentences

Total loans receivable, net (4) $ 9,396,607 937,862 10,334,469 8,785,275 1,128,876 9,914,151

(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

(1) Includes originated and purchased loan pools purchased in an asset acquisition.

(2) Includes loans subject to purchase accounting in a business combination.

(3) Includes fair value of $ 31.2 million and $ 25.1 million of loans held-for-sale at June 30, 2022 and December 31, 2021, respectively.

(4) Includes $ 67.0 million and $ 62.8 million of net unearned income, unamortized premiums and discounts and deferred fees and costs at June 30, 2022 and December 31, 2021, respectively.

During the six months ended June 30, 2022, the Company purchased a total of $ 115.8 million small business equipment finance loan pools and a total of $ 188.3 million one- to four-family jumbo mortgage loan pools.

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 June 30, 2022 (in thousands):

Balance as of June 30, 2022 Current period provision Charge-offs Recoveries Balance as of March 31, 2022

Allowance for Credit Losses

22 unchanged sentences

Total off-balance sheet exposure $ 7,450 3,396 — — 4,054

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

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 June 30, 2021 (in thousands):

Balance as of June 30, 2021 Current period provision Charge-offs Recoveries Balance as of March 31, 2021

Allowance for Credit Losses

22 unchanged sentences

Total off-balance sheet exposure $ 3,389 ( 1,230 ) — — 4,619

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):

The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the six months ended June 30, 2022 (in thousands):

Balance as of June 30, 2022 Current period provision Charge-offs Recoveries Balance as of December 31, 2021

Allowance for Credit Losses

Personal Banking:

Residential mortgage loans $ 16,158 9,685 ( 1,321 ) 421 7,373

Home equity loans 5,232 ( 214 ) ( 702 ) 848 5,300

Vehicle loans 15,738 583 ( 1,581 ) 1,253 15,483

Consumer loans 779 ( 691 ) ( 2,054 ) 640 2,884

Total Personal Banking 37,907 9,363 ( 5,658 ) 3,162 31,040

Commercial Banking:

Commercial real estate loans 39,641 ( 11,582 ) ( 5,416 ) 2,498 54,141

Commercial real estate loans - owner occupied 4,095 201 — 11 3,883

Commercial loans 16,712 3,166 ( 1,010 ) 1,379 13,177

Total Commercial Banking 60,448 ( 8,215 ) ( 6,426 ) 3,888 71,201

Total $ 98,355 1,148 ( 12,084 ) 7,050 102,241

Allowance for Credit Losses - off-balance sheet exposure

Personal Banking:

Residential mortgage loans $ 6 4 — — 2

Home equity loans 64 25 — — 39

Total Personal Banking 70 29 — — 41

Commercial Banking:

Commercial real estate loans 3,463 2,582 — — 881

Commercial real estate loans - owner occupied 328 186 — — 142

Commercial loans 3,589 2,195 — — 1,394

Total Commercial Banking 7,380 4,963 — — 2,417

Total off-balance sheet exposure $ 7,450 4,992 — — 2,458

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

Balance as of June 30, 2021 Current

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

Allowance for Credit Losses

Personal Banking:

Residential mortgage loans $ 7,247 1,330 ( 1,625 ) 276 7,266

Home equity loans 7,239 1,601 ( 607 ) 253 5,992

Vehicle loans 12,888 ( 423 ) ( 2,905 ) 1,391 14,825

Consumer loans 2,801 1,342 ( 2,099 ) 687 2,871

Total Personal Banking 30,175 3,850 ( 7,236 ) 2,607 30,954

Commercial Banking:

Commercial real estate loans 64,580 ( 7,756 ) ( 7,700 ) 655 79,381

Commercial real estate loans - owner occupied 4,729 ( 4,904 ) ( 890 ) 5 10,518

Commercial loans 17,846 3,190 ( 1,215 ) 2,297 13,574

Total Commercial Banking 87,155 ( 9,470 ) ( 9,805 ) 2,957 103,473

Total $ 117,330 ( 5,620 ) ( 17,041 ) 5,564 134,427

Allowance for Credit Losses - off-balance sheet exposure

Personal Banking:

Residential mortgage loans $ 2 — — — 2

Home equity loans 42 7 — — 35

Total Personal Banking 44 7 — — 37

Commercial Banking:

Commercial real estate loans 1,932 ( 1,517 ) — — 3,449

Commercial real estate loans - owner occupied 181 ( 145 ) — — 326

Commercial loans 1,232 ( 1,319 ) — — 2,551

Total Commercial Banking 3,345 ( 2,981 ) — — 6,326

Total off-balance sheet exposure $ 3,389 ( 2,974 ) — — 6,363

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at June 30, 2022 (in thousands):

receivable Allowance for

36 unchanged sentences

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 quarter ended March 31, 2022 (in thousands):

March 31, 2022

The following table presents the amortized cost of our loans on nonaccrual status as of the beginning and end of the period ended June 30, 2022 (in thousands):

June 30, 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

11 unchanged sentences

Total $ 158,471 28,279 70,106 98,385 379

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

During the three and six months ended June 30, 2022, we recognized $ 137,000 and $ 290,000 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):

14 unchanged sentences

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 March 31, 2022 (in thousands):

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of June 30, 2022 (in thousands):

Real estate Equipment Total

39 unchanged sentences

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,

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

For the quarter ended June 30,

contracts Amount Number of

5 unchanged sentences

Net paydowns — ( 479 ) — ( 1,610 )

Paid-off loans:

Residential mortgage loans — — 4 ( 726 )

Home equity loans 1 ( 13 ) 1 ( 11 )

Commercial real estate loans 2 ( 80 ) 2 ( 302 )

Commercial loans 1 ( 7 ) 1 ( 69 )

Ending TDR balance:

128 $ 54,237 158 $ 27,431

Accruing TDRs $ 16,590 $ 18,480

Nonaccrual TDRs 37,647 8,951

For the six months ended June 30,

contracts Amount Number of

contracts Amount

Beginning TDR balance:

134 $ 30,288 170 $ 32,135

New TDRs 2 26,115 2 2,295

Re-modified TDRs 6 6,603 5 1,241

Net paydowns — ( 1,509 ) — ( 4,073 )

Residential mortgage loans 1 ( 3 ) — —

Paid-off loans:

9 unchanged sentences

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 March 31, 2022

For the quarter ended June 30, 2022 For the six months ended June 30, 2022

contracts Recorded

2 unchanged sentences

investment Current

allowance Number of

contracts Recorded

at the time of

modification Current

investment Current

Commercial Banking:

Commercial real estate loans 3 $ 58,042 29,292 1,122 4 $ 58,372 29,492 1,133

Commercial loans 4 3,524 3,226 410 4 3,524 3,226 411

Total Commercial Banking 7 61,566 32,518 1,532 8 61,896 32,718 1,544

Total 7 $ 61,566 32,518 1,532 8 $ 61,896 32,718 1,544

For the quarter ended March 31, 2021

For the quarter ended June 30, 2021 For the six months ended June 30, 2021

contracts Recorded

2 unchanged sentences

investment Current

allowance Number of

contracts Recorded

at the time of

modification Current

investment Current

Personal Banking:

4 unchanged sentences

Commercial real estate loans 1 725 343 34 3 1,537 1,125 148

Commercial loans 2 2,396 2,295 — 2 2,396 2,295 —

Total Commercial Banking 3 3,121 2,638 34 5 3,933 3,420 148

Total 3 $ 3,121 2,638 34 7 $ 4,057 3,536 158

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):

The following table provides information as of June 30, 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 June 30, 2022 (in thousands):

Type of modification

Number of contracts Rate Payment Maturity date Other Total

Number of contracts Rate Maturity date Total

Commercial Banking:

Commercial real estate loans 3 $ 4,179 25,113 29,292

Commercial loans 4 — 3,226 3,226

Total Commercial Banking 7 4,179 28,339 32,518

Total 7 $ 4,179 28,339 32,518

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):

The following table provides information as of June 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 June 30, 2021 (in thousands):

Type of modification

Number of contracts Rate Payment Maturity date Other Total

Number of contracts Rate Maturity date Total

Commercial Banking:

Commercial real estate loans 1 $ — 343 343

Commercial loans 2 — 2,295 2,295

Total Commercial Banking 3 — 2,638 2,638

Total 3 $ — 2,638 2,638

Type of modification

Number of contracts Rate Maturity date Total

Commercial Banking:

Commercial real estate loans 4 $ 4,179 25,313 29,492

Commercial loans 4 — 3,226 3,226

Total Commercial Banking 8 4,179 28,539 32,718

Total 8 $ 4,179 28,539 32,718

Type of modification

Number of contracts Rate Maturity date Other Total

Personal Banking:

4 unchanged sentences

Commercial real estate loans 3 — 1,052 73 1,125

Commercial loans 2 — 2,295 — 2,295

Total Commercial Banking 5 — 3,347 73 3,420

Total 7 $ 116 3,347 73 3,536

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

The following table provides information related to troubled debt restructurings modified within the previous twelve months of June 30, 2022 that subsequently defaulted:

contracts Recorded

6 unchanged sentences

Total 1 $ 4,167 3,823 —

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):

The following table provides information related to troubled debt restructurings modified within the previous twelve months of June 30, 2021 that subsequently defaulted:

contracts Recorded

at the time of

modification Current

investment Current

Commercial Banking:

Commercial real estate loans 1 $ 454 454 50

Total Commercial Banking 1 454 454 50

Total 1 $ 454 454 50

The following table provides information related to the amortized cost basis of loan payment delinquencies at June 30, 2022 (in thousands):

delinquent 60-89 days

67 unchanged sentences

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

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

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 June 30, 2022 (in thousands):

YTD June 30, 2022 2021 2020 2019 2018 Prior Revolving loans Revolving loans converted to term loans Total loans

Personal Banking:

34 unchanged sentences

Total loans $ 1,392,376 2,275,171 1,563,589 1,053,084 656,063 2,584,732 833,015 74,794 10,432,824

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

During the six months ended June 30, 2022, $ 9.2 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):

36 unchanged sentences

Total loans $ 2,316,856 1,791,969 1,265,376 773,601 647,737 2,334,399 803,210 83,244 10,016,392

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

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

(4) Goodwill and Other Intangible Assets

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Amortizable intangible assets:

Core deposit intangibles - gross $ 74,899 74,899

Acquisitions — —

accumulated amortization ( 64,416 ) ( 62,158 )

5 unchanged sentences

Total intangible assets - net $ 10,538 12,836

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

The following table shows the actual aggregate amortization expense for the quarters and six months ended June 30, 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 June 30, 2022 $ 1,115

For the quarter ended June 30, 2021 1,433

For the six months ended June 30, 2022 2,298

For the six months ended June 30, 2021 3,027

For the year ending December 31, 2022 4,277

9 unchanged sentences

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 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.

Balance at June 30, 2022 $ 380,997

We performed our annual goodwill impairment test as of June 30, 2022 in accordance with ASC 350 and concluded that goodwill was not impaired.

(5) Borrowed Funds

(a) Borrowings

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

March 31, 2022 December 31, 2021

Borrowed funds at June 30, 2022 and December 31, 2021 are presented in the following table:

June 30, 2022 December 31, 2021

Amount Average rate Amount Average rate

Collateralized borrowings, due within one year $ 117,440 0.19 % $ 139,093 0.19 %

Collateral received, due within one year 13,050 1.58 % — —

Total borrowed funds $ 130,490 $ 139,093

3 unchanged sentences

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 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.

The revolving line of credit had no balance as of June 30, 2022 and December 31, 2021.

At June 30, 2022 and December 31, 2021, collateralized borrowings due within one year were $ 117.4 million and $ 139.1 million, respectively.

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

At June 30, 2022 and December 31, 2021, collateral received was $ 13.1 million and $ 0 , respectively.

This represents collateral posted to us from our derivative counterparties.

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

1 unchanged sentence

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

At June 30, 2022 and December 31, 2021, subordinated debentures, net of issuance costs, were $ 113.7 million and $ 123.6 million, respectively.

(b) Trust Preferred Securities

7 unchanged sentences

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

Maturity date Interest rate Capital debt securities June 30, 2022 December 31, 2021

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

35 unchanged sentences

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

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.

At June 30, 2022, the maximum potential amount of future payments we could be required to make under these non-recourse standby letters of credit was $ 46.5 million, of which $ 36.8 million is fully collateralized.

At June 30, 2022, we had a liability which represents deferred income of $ 685,000 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 March 31,

Quarter ended June 30, Six months ended June 30,

2022 2021 2022 2021

Net income $ 33,426 48,967 61,713 89,204

8 unchanged sentences

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 March 31,

Quarter ended June 30,

Pension benefits Other post-retirement benefits

6 unchanged sentences

Net periodic cost $ 223 1,372 12 8

Six months ended June 30,

Pension benefits Other post-retirement benefits

2022 2021 2022 2021

Service cost $ 5,198 5,720 — —

Interest cost 3,342 3,035 20 9

Expected return on plan assets ( 7,728 ) ( 6,930 ) — —

Amortization of prior service cost ( 1,128 ) ( 1,161 ) — —

Amortization of the net loss 762 2,079 4 7

Net periodic cost $ 446 2,743 24 16

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

20 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, foreign exchange swaps, risk participation agreements, and accrued interest payable.

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

Marketable Securities

34 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.

Cash Flow Hedges, Interest Rate and Foreign Exchange Swap Agreements

Interest Rate and Foreign Exchange Swap Agreements and Risk Participation Agreements

The fair value of interest rate swaps is based upon the present value of the expected future cash flows using the LIBOR swap curve, the basis for the underlying interest rate.

13 unchanged sentences

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

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):

At June 30, 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 June 30, 2022 (in thousands):

amount Estimated

8 unchanged sentences

Interest rate lock commitments 1,520 1,520 — — 1,520

Forward commitments 213 213 — 213 —

Foreign exchange swaps 2 2 — 2 —

Interest rate swaps not designated as hedging instruments 31,018 31,018 — 31,018 —

7 unchanged sentences

Junior subordinated debentures 129,184 114,729 — — 114,729

Forward commitments 43 43 — 43 —

Foreign exchange swaps 6 6 — 6 —

Interest rate swaps not designated as hedging instruments 31,028 31,028 — 31,028 —

29 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 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):

The methods and assumptions detailed above were used in estimating the fair value of financial instruments at both June 30, 2022 and December 31, 2021.

The following table represents assets and liabilities measured at fair value on a recurring basis at June 30, 2022 (in thousands):

Level 1 Level 2 Level 3 Total assets

4 unchanged sentences

States and political subdivisions — 115,397 — 115,397

Corporate — 13,510 — 13,510

Total debt securities — 236,903 — 236,903

10 unchanged sentences

Interest rate lock commitments — — 1,520 1,520

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

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

Forward commitments — 213 213

1 unchanged sentence

Interest rate swaps not designated as hedging instruments — 31,018 — 31,018

Total assets $ — 1,395,976 1,520 1,397,496

Interest rate swaps not designated as hedging instruments — 31,028 — 31,028

Risk participation agreements — 18 — 18

27 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 March 31,

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

For the quarter ended June 30, Six months ended June 30, 2022

2022 2021 2022 2021

Beginning balance, $ 1,680 5,060 1,684 6,465

Interest rate lock commitments:

2 unchanged sentences

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.

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):

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 June 30, 2022 (in thousands):

Level 1 Level 2 Level 3 Total assets

1 unchanged sentence

Loans individually assessed $ — — 7,168 7,168

Mortgage servicing rights — — 22 22

Real estate owned, net — — 1,205 1,205

13 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 March 31, 2022 (in thousands):

Fair value Valuation techniques Significant

2 unchanged sentences

Discounted cash flow Discount rate 5.46 % to 13.26 % ( 6.86 %)

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

Prepayment rate 7.1 % to 18.3 % ( 9.8 %)

Expected life (months) 47.8 to 102.3 (77.1)

Option adjusted spread 650 basis points

Forward yield curve 0.23 % to 1.92 %

Real estate owned, net 1,205 Appraisal value (1) Estimated cost to sell 10.0 %

10 unchanged sentences

Customer swaps are recorded within other assets or other liabilities on the consolidated statement of financial condition at their estimated fair value.

Changes to the fair value of assets and liabilities arising from these derivatives are included, net, in other operating income in the Consolidated Statement of Income.

Changes to the

fair value of assets and liabilities arising from these derivatives are included, net, in other operating income in the Consolidated Statement of Income.

We enter into interest rate lock commitments for residential mortgage loans which commit us to lend funds to a potential borrower at a specific interest rate within a specified period of time.

11 unchanged sentences

Notional amount Fair value Notional amount Fair value

At March 31, 2022

At June 30, 2022

Derivatives not designated as hedging instruments:

14 unchanged sentences

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

For the quarter ended March 31,

For the quarter ended June 30, For the six months ended June 30,

2022 2021 2022 2021

Non-hedging swap derivatives:

Increase in other income $ 61 524

Increase in mortgage banking income 418 2,060

Increase/(decrease) in other income $ 53 ( 26 ) 114 498

(Decrease)/increase in mortgage banking income ( 96 ) 1,510 322 3,570

(11) Legal Proceedings

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 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.

As of June 30, 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 March 31, 2022.

(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 March 31, 2022

For the quarter ended June 30, 2022

on securities

available-for-sale Change in

rate swaps Change in

defined benefit

pension plans Total

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

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

Other comprehensive loss before reclassification adjustments (1) ( 39,954 ) — ( 39,954 )

1 unchanged sentence

Net other comprehensive loss ( 39,955 ) ( 131 ) ( 40,086 )

Balance as of June 30, 2022 $ ( 117,056 ) ( 25,574 ) ( 142,630 )

For the quarter ended June 30, 2021

gains/(losses)

on securities

available-for-sale Change in

defined benefit

pension plans Total

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

For the quarter ended March 31, 2021

Other comprehensive loss before reclassification adjustments (4) 4,322 — 4,322

Amounts reclassified from accumulated other comprehensive income (5) (6) ( 136 ) 334 198

Net other comprehensive income 4,186 334 4,520

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

(1) Consists of unrealized holding losses, net of tax of $ 11,973 .

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

(3) Consists of realized gains, net of tax of $ 51 .

(4) Consists of unrealized holding gains, net of tax ($ 1,245 ).

(5) Consists of realized gains, net of tax $ 43 .

(6) Consists of realized losses, net of tax of ($ 128 ).

For the six months ended June 30, 2022

gains/(losses)

1 unchanged sentence

available-for-sale Change in

rate swaps Change in

defined benefit

3 unchanged sentences

Amounts reclassified from accumulated other comprehensive income (2) (3) ( 2 ) ( 262 ) ( 264 )

Net other comprehensive loss ( 104,739 ) ( 262 ) ( 105,001 )

Balance as of June 30, 2022 $ ( 117,056 ) ( 25,574 ) ( 142,630 )

For the six months ended June 30, 2021

on securities

available-for-sale Change in

defined benefit

pension plans Total

Balance as of December 31, 2020 $ 16,843 ( 50,392 ) ( 33,549 )

Other comprehensive income/(loss) before reclassification adjustments (4) ( 13,099 ) — ( 13,099 )

Amounts reclassified from accumulated other comprehensive income (5) (6) ( 211 ) 667 456

Net other comprehensive (loss)/income ( 13,310 ) 667 ( 12,643 )

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

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

(1) Consists of unrealized holding losses, net of tax of $ 30,850 .

5 unchanged sentences

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