What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-03 compared with 2023-08-04 · 185 added, 170 removed, 1282 unchanged (22% of the section changed)

4 unchanged sentences

(in thousands, except share data)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Cash and cash equivalents $ 161,995 139,365

46 unchanged sentences

(in thousands, except share data)

Quarter ended June 30, Six months ended June 30,

Quarter ended September 30, Nine months ended September 30,

2023 2022 2023 2022

56 unchanged sentences

(in thousands)

Quarter ended June 30, Six months ended June 30,

Quarter ended September 30, Nine months ended September 30,

2023 2022 2023 2022

Net income $ 39,220 37,304 105,943 99,017

Other comprehensive (loss)/income net of tax:

Other comprehensive loss net of tax:

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

3 unchanged sentences

— — 5,636 ( 2 )

Net unrealized holding (losses)/gains on marketable securities ( 12,083 ) ( 39,955 ) 934 ( 104,739 )

Net unrealized holding losses on marketable securities ( 29,715 ) ( 48,387 ) ( 28,781 ) ( 153,126 )

Change in fair value of interest rate swaps, net of tax of ($ 533 ), $ 0 , ($ 1,041 ) and $ 0 , respectively

3 unchanged sentences

( 382 ) ( 131 ) ( 1,146 ) ( 393 )

Other comprehensive (loss)/income ( 10,728 ) ( 40,086 ) 1,907 ( 105,001 )

Other comprehensive loss ( 28,272 ) ( 48,518 ) ( 26,365 ) ( 153,519 )

Total comprehensive income/(loss) $ 10,948 ( 11,214 ) 79,578 ( 54,502 )

6 unchanged sentences

other comprehensive loss Total shareholders’ equity

Quarter ended June 30, 2023 Shares Amount

Beginning balance at March 31, 2023 127,065,400 $ 1,271 1,020,855 649,672 ( 158,523 ) 1,513,275

Quarter ended September 30, 2023 Shares Amount

Beginning balance at June 30, 2023 127,088,963 $ 1,271 1,022,189 657,292 ( 169,251 ) 1,511,501

Comprehensive income:

8 unchanged sentences

— — — ( 25,420 ) — ( 25,420 )

Ending balance at June 30, 2023 127,088,963 $ 1,271 1,022,189 657,292 ( 169,251 ) 1,511,501

Ending balance at September 30, 2023 127,101,349 $ 1,271 1,023,591 671,092 ( 197,523 ) 1,498,431

Additional paid-in capital Retained earnings Accumulated

other comprehensive loss Total shareholders’ equity

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

Quarter ended September 30, 2022 Shares Amount

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

Comprehensive income:

8 unchanged sentences

— — — ( 25,379 ) — ( 25,379 )

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

Ending balance at September 30, 2022 126,921,989 $ 1,269 1,017,189 632,476 ( 191,148 ) 1,459,786

See accompanying notes to unaudited Consolidated Financial Statements.

4 unchanged sentences

other comprehensive income/(loss) Total shareholders’ equity

Six months ended June 30, 2023 Shares Amount

Nine months ended September 30, 2023 Shares Amount

Beginning balance at December 31, 2022 127,028,848 $ 1,270 1,019,647 641,727 ( 171,158 ) 1,491,486

1 unchanged sentence

Net income — — — 105,943 — 105,943

Other comprehensive income, net of tax of ($ 1,472 )

Other comprehensive loss, net of tax of $ 7,287

— — — — ( 26,365 ) ( 26,365 )

7 unchanged sentences

— — — ( 76,249 ) — ( 76,249 )

Ending balance at June 30, 2023 127,088,963 $ 1,271 1,022,189 657,292 ( 169,251 ) 1,511,501

Ending balance at September 30, 2023 127,101,349 $ 1,271 1,023,591 671,092 ( 197,523 ) 1,498,431

Additional paid-in capital Retained earnings Accumulated

other comprehensive income/(loss) Total shareholders’ equity

Six months ended June 30, 2022 Shares Amount

Nine months ended September 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

9 unchanged sentences

— — — ( 76,070 ) — ( 76,070 )

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

Ending balance at September 30, 2022 126,921,989 $ 1,269 1,017,189 632,476 ( 191,148 ) 1,459,786

See accompanying notes to unaudited Consolidated Financial Statements.

3 unchanged sentences

(in thousands)

Six months ended June 30,

Nine months ended September 30,

Operating activities:

8 unchanged sentences

Net depreciation, amortization and accretion 16,473 3,874

Decrease in other assets ( 40,281 ) ( 23,489 )

Decrease in other liabilities ( 2,545 ) ( 16,891 )

Increase in other assets ( 114,158 ) ( 31,790 )

Increase in other liabilities 15,617 11,270

Net amortization on marketable securities 2,438 3,849

1 unchanged sentence

Noncash write-down of real estate owned 37 44

Deferred income tax expense 1,010 2,256

Deferred income tax (benefit)/expense ( 3,610 ) 1,928

Origination of loans held-for-sale ( 137,789 ) ( 317,117 )

12 unchanged sentences

Proceeds from loan maturities and principal reductions 2,524,676 3,110,264

Net (redemptions)/proceeds of FHLB stock ( 4,470 ) 822

Net redemptions of FHLB stock ( 261 ) ( 5,097 )

Proceeds from sale of real estate owned 1,343 1,469

Proceeds from sale of real estate owned for investment, net — 229

(Purchases)/disposals of premises and equipment, net ( 1,330 ) 1,687

Purchases of premises and equipment, net ( 1,617 ) ( 613 )

Net cash used in investing activities ( 178,256 ) ( 761,582 )

Nine months ended September 30,

Financing activities:

1 unchanged sentence

Repayments of long-term borrowings — ( 10,094 )

Net decrease in short-term borrowings ( 48,852 ) ( 8,603 )

Net (decrease)/increase in short-term borrowings ( 76,578 ) 10,943

Increase in advances by borrowers for taxes and insurance ( 19,960 ) ( 14,935 )

2 unchanged sentences

Net cash provided by/(used in) financing activities 153,157 ( 509,208 )

Net decrease in cash and cash equivalents $ ( 11,738 ) ( 774,727 )

Net increase/(decrease) in cash and cash equivalents $ 22,630 ( 1,160,710 )

Cash and cash equivalents at beginning of period $ 139,365 1,279,259

Net decrease in cash and cash equivalents ( 11,738 ) ( 774,727 )

Net increase/(decrease) in cash and cash equivalents 22,630 ( 1,160,710 )

Cash and cash equivalents at end of period $ 161,995 118,549

21 unchanged sentences

These reclassifications had no effect on the reported results of operations.

An adjustment has been made to the Consolidated Statements of Income and Consolidated Statements of Cash Flows for the quarter and six months ended June 30, 2022, to reclassify the provision for credit losses - unfunded commitments, previously presented in other expense, to provide additional transparency to financial statement users.

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, 2023, or any other period.

An adjustment has been made to the Consolidated Statements of Income and Consolidated Statements of Cash Flows for the quarter and nine months ended September 30, 2022, to reclassify the provision for credit losses - unfunded commitments, previously presented in other expense, to provide additional transparency to financial statement users.

The results of operations for the quarter ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023, or any other period.

Stock-Based Compensation

5 unchanged sentences

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

As of June 30, 2023, we awarded discretionary grants of 168,639 RSUs with a weighted average grant date fair value of $ 10.92 .

These shares vest over a two or three years period with the first vesting occurring one year from the grant date.

Stock-based compensation expense of $ 1.3 million and $ 1.4 million for the quarters ended June 30, 2023 and 2022, respectively, was recognized in compensation expense relating to our stock benefit plans.

At June 30, 2023, there was compensation expense of $ 532,000 to be recognized for awarded but unvested stock options, $ 2.7 million for unvested restricted common shares, $ 4.1 million to be recognized for awarded but unvested RSUs, $ 300,000 to be recognized for awarded but unvested RSAs, and $ 2.3 million to be recognized for awarded but unvested PSUs.

As of September 30, 2023, we awarded discretionary grants of 178,483 RSUs with a weighted average grant date fair value of $ 10.87 .

These shares vest over a two or three year period with the first vesting occurring one year from the grant date.

Stock-based compensation expense of $ 1.3 million and $ 944,000 for the quarters ended September 30, 2023 and 2022, respectively, was recognized in compensation expense relating to our stock benefit plans.

At September 30, 2023, there was compensation expense of $ 401,000 to be recognized for awarded but unvested stock options, $ 2.5 million for unvested restricted common shares, $ 3.7 million to be recognized for awarded but unvested RSUs, $ 193,000 to be recognized for awarded but unvested RSAs, and $ 2.1 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.

We had $ 473,000 of liability for unrecognized tax benefits as of both June 30, 2023 and December 31, 2022.

We had $ 702,000 and $ 473,000 of liability for unrecognized tax benefits as of September 30, 2023 and December 31, 2022.

We recognize interest accrued related to:

14 unchanged sentences

This change did not have a material effect on our consolidated financial statements.

In March 2020, the FASB issued Accounting Standards Update (“ASU”) No.

In March 2020, the FASB issued ASU No.

2020-04, “ Facilitation of the Effects of Reference Rate Reform on Financial Reporting .” This ASU provides temporary optional guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates.

9 unchanged sentences

This ASU is effective upon issuance through December 31, 2024, and can be adopted at any time during this period.

During the quarter-ended June 30, 2023, we completed our LIBOR transition plan and modified the Company’s loan and other financial instrument contracts that are impacted by the transition.

During the current year, we completed our LIBOR transition plan and modified the Company’s loan and other financial instrument contracts that are impacted by the transition.

The Company chose the Secured Overnight Financing Rate (“SOFR”) as its alternative replacement for LIBOR on both back-to-back swaps and variable rate loans.

1 unchanged sentence

(2) Marketable Securities

The following table shows the portfolio of marketable securities available-for-sale at June 30, 2023 (in thousands):

The following table shows the portfolio of marketable securities available-for-sale at September 30, 2023 (in thousands):

Debt issued by the U.S government and agencies:

5 unchanged sentences

Municipal securities:

Due within one year 500 — — 500

Due after one year through five years 954 3 ( 9 ) 948

32 unchanged sentences

Total marketable securities available-for-sale $ 1,431,728 105 ( 213,725 ) 1,218,108

The following table shows the portfolio of marketable securities held-to-maturity at June 30, 2023 (in thousands):

The following table shows the portfolio of marketable securities held-to-maturity at September 30, 2023 (in thousands):

Debt issued by government-sponsored enterprises:

19 unchanged sentences

Total marketable securities held-to-maturity $ 881,249 — ( 129,865 ) 751,384

The following table shows the contractual maturity of our residential mortgage-backed securities available-for-sale at June 30, 2023 (in thousands):

The following table shows the contractual maturity of our residential mortgage-backed securities available-for-sale at September 30, 2023 (in thousands):

Residential mortgage-backed securities:

4 unchanged sentences

Total residential mortgage-backed securities $ 1,051,111 839,109

The following table shows the contractual maturity of our residential mortgage-backed securities held-to-maturity at June 30, 2023 (in thousands):

The following table shows the contractual maturity of our residential mortgage-backed securities held-to-maturity at September 30, 2023 (in thousands):

Residential mortgage-backed securities:

3 unchanged sentences

Total residential mortgage-backed securities $ 705,649 579,955

The following table shows the fair value of and gross unrealized losses on available for sale investment securities and held to maturity investment securities, for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at June 30, 2023 (in thousands):

Less than 12 months 12 months or more Total

17 unchanged sentences

Total $ 448,576 ( 27,487 ) 1,509,214 ( 316,103 ) 1,957,790 ( 343,590 )

The Company does not believe that the available-for-sale debt securities that were in an unrealized loss position as of June 30, 2023, which were comprised of 543 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 September 30, 2023, which were comprised of 548 individual securities, represents a credit loss impairment.

All of these securities were issued by U.S.

13 unchanged sentences

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

The decline in fair value of the held-to-maturity debt securities were primarily attributable to changes in the interest rate environment and not due to the credit quality of these investment securities, therefore, the Company did not record an allowance for credit losses for these securities as of June 30, 2023.

The following table presents the credit quality of our held-to-maturity securities, based on the latest information available as of June 30, 2023 (in thousands).

The following table presents the credit quality of our held-to-maturity securities, based on the latest information available as of September 30, 2023 (in thousands).

The credit ratings are sourced from nationally recognized rating agencies, which include Moody’s and S&P, and 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 June 30, 2023.

All of our held-to-maturity securities were current in their payment of principal and interest as of September 30, 2023.

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 June 30, 2023 and December 31, 2022 (in thousands):

June 30, 2023 December 31, 2022

The following table shows a summary of our loans receivable at amortized cost basis at September 30, 2023 and December 31, 2022 (in thousands):

September 30, 2023 December 31, 2022

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

15 unchanged sentences

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

(3) Includes $ 16.1 million and $ 9.9 million of loans held-for-sale at June 30, 2023 and December 31, 2022, respectively.

(4) Includes $ 75.8 million and $ 76.1 million of net unearned income, unamortized premiums and discounts and deferred fees and costs at June 30, 2023 and December 31, 2022, 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 June 30, 2023 (in thousands):

Balance as of June 30, 2023 Current period provision Charge-offs Recoveries Balance as of March 31, 2023

(3) Includes $ 10.2 million and $ 9.9 million of loans held-for-sale at September 30, 2023 and December 31, 2022, respectively.

(4) Includes $ 435,000 and $ 0 of loans held-for-sale at September 30, 2023 and December 31, 2022, respectively.

(5) Includes $ 71.5 million and $ 76.1 million of net unearned income, unamortized premiums and discounts and deferred fees and costs at September 30, 2023 and December 31, 2022, 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 September 30, 2023 (in thousands):

Balance as of September 30, 2023 Current period provision Charge-offs Recoveries Balance as of June 30, 2023

Allowance for Credit Losses

22 unchanged sentences

Total off-balance sheet exposure $ 12,978 ( 2,981 ) — — 15,959

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

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, 2022 (in thousands):

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

Allowance for Credit Losses

22 unchanged sentences

Total off-balance sheet exposure $ 11,035 3,585 — — 7,450

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, 2023 (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 nine months ended September 30, 2023 (in thousands):

September 30,

2023 Current period provision Charge-offs Recoveries ASU 2022-02 Adoption Balance December 31, 2022

25 unchanged sentences

We evaluated the effect of the revision, both qualitatively and quantitatively, and concluded that the impact of the revision was not material.

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

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

Allowance for Credit Losses

23 unchanged sentences

Total off-balance sheet exposure $ 11,035 8,577 — — 2,458

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 loan portfolio by portfolio segment and by class of financing receivable at June 30, 2023 (in thousands):

During the nine months ended September 30, 2022, the Company purchased a total of $ 182.8 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 loan portfolio by portfolio segment and by class of financing receivable at September 30, 2023 (in thousands):

receivable Allowance for

33 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 period ended June 30, 2023 (in thousands):

June 30, 2023

The following table presents the amortized cost of our loans on nonaccrual status as of the beginning and end of the nine-month period ended September 30, 2023 (in thousands):

September 30, 2023

Nonaccrual loans at January 1, 2023 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 $ 81,236 42,878 33,776 76,654 728

During the three and six months ended June 30, 2023, we did no t recognize interest income on nonaccrual loans.

During the three and nine months ended September 30, 2023, we did no t recognize any interest income on nonaccrual loans.

The following table presents the amortized cost of our loans on nonaccrual status as of the year ended December 31, 2022 (in thousands):

14 unchanged sentences

During the year ended December 31, 2022, we recognized $ 678,000 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 June 30, 2023 (in thousands):

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of September 30, 2023 (in thousands):

Real estate Total

23 unchanged sentences

a term extension, principal forgiveness, an other-than-insignificant payment delay, and/or an interest rate reduction.

The following table presents the amortized cost basis of loans as of June 30, 2023 that were both experiencing financial difficulty and modified during the periods indicated, by class and by type of modification.

The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financial receivable is also presented below.

For the quarter ended June 30, 2023 For the six months ended June 30, 2023

Term extension Total class of financing receivable Term extension Combination term extension and interest rate reduction Total class of financing receivable

The following table presents the amortized cost basis of loans as of September 30, 2023 that were both experiencing financial difficulty and modified during the periods indicated, by class and by type of modification.

For the quarter ended September 30, 2023 For the nine months ended September 30, 2023

Term extension Combination term extension and interest rate reduction Total class of financing receivable Term extension Combination term extension and interest rate reduction Total class of financing receivable

Personal Banking:

12 unchanged sentences

The following table presents the effect of the loan modifications presented above to borrowers experiencing financial difficulty for the periods indicated:

For the quarter ended June 30, 2023 For the six months ended June 30, 2023

Weighted-average term extension in months Weighted-average interest rate reduction Weighted-average term extension in months

For the quarter ended September 30, 2023 For the nine months ended September 30, 2023

Weighted-average interest rate reduction Weighted-average term extension in months Weighted-average interest rate reduction Weighted-average term extension in months

Personal Banking:

9 unchanged sentences

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table presents the performance of loans that such loans have been modified since the adoption of ASU 2022-02:

The following table presents the performance of loans that such loans have been modified since the adoption of ASU 2022-02 (in thousands):

Current 30-59 days

8 unchanged sentences

Commercial real estate loans 74 — — 123

Commercial real estate loans - owner occupied — — — —

Commercial loans — 15 — 648

1 unchanged sentence

Total loans $ 895 15 — 771

No loans modified since the adoption of ASU 2022-02 subsequently defaulted during the quarter ended June 30, 2023.

A modification is considered to be in default when the loan is 90 days or more past due.

The following table provides the amortized cost basis of financing receivables that had a payment default during the period and were modified since the adoption of ASU 2022-02 to borrowers experiencing financial difficulty (in thousands) :

Term extension

Commercial Banking:

Commercial real estate loans $ 123

Commercial loans 648

Total Commercial Banking 771

The modifications to borrowers experiencing financial distress are included in their respective portfolio segment and the current loan balance and updated loan terms are run through their respective ACL models to arrive at the quantitative portion of the ACL.

4 unchanged sentences

The following tables provide a roll forward of troubled debt restructurings for the periods indicated, prior to the adoption of ASU 2022-02 (dollars in thousands):

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

contracts Amount Number of Contracts Amount

For the quarter ended September 30, 2022 For the nine months ended September 30, 2022

Number of Contracts Amount Number of Contracts Amount

Beginning TDR balance:

8 unchanged sentences

Commercial real estate loans 1 ( 3,349 ) 4 ( 3,718 )

Commercial real estate loans - owner occupied 1 ( 44 ) 1 ( 44 )

Commercial loans 3 ( 3,459 ) 4 ( 3,466 )

3 unchanged sentences

Nonaccrual TDRs 30,406 30,406

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, prior to the adoption of ASU 2022-02 (in thousands):

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

For the quarter ended September 30, 2022 For the nine months ended September 30, 2022

contracts Recorded

7 unchanged sentences

investment Current

Personal Banking:

Residential mortgage loans 2 $ 147 144 15 2 $ 147 144 15

Home equity loans 5 160 154 23 5 160 154 23

Total Personal Banking 7 307 298 38 7 307 298 38

Commercial Banking:

3 unchanged sentences

Total 10 $ 1,249 1,198 147 18 $ 38,458 26,804 160

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, prior to the adoption of ASU 2022-02 (in thousands):

The following table provides information as of September 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 September 30, 2022, prior to the adoption of ASU 2022-02 (dollars in thousands):

Type of modification

Number of contracts Rate Maturity date Total

Number of contracts Maturity date Total

Personal Banking:

Residential mortgage loans 2 $ 144 144

Home equity loans

Total Personal Banking 7 298 298

Commercial Banking:

3 unchanged sentences

Total 10 $ 1,198 1,198

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 six months ended June 30, 2022, prior to the adoption of ASU 2022-02 (in thousands):

The following table provides information as of September 30, 2022 for TDRs (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable for modifications during the nine months ended September 30, 2022, prior to the adoption of ASU 2022-02 (dollars in thousands):

Type of modification

Number of contracts Rate Maturity date Total

Personal Banking:

Residential mortgage loans 2 $ — 144 144

Home equity loans

Total Personal Banking 7 — 298 298

Commercial Banking:

3 unchanged sentences

Total 18 $ 4,166 22,638 26,804

The following table provides information related to troubled debt restructurings modified within the previous twelve months of June 30, 2022 that subsequently defaulted, prior to the adoption of ASU 2022-02:

contracts Recorded

at the time of

modification Current

investment Current

Commercial Banking:

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

Total Commercial Banking 1 4,167 3,823 —

Total 1 $ 4,167 3,823 —

The following table provides information related to the amortized cost basis of loan payment delinquencies at June 30, 2023 (in thousands):

No TDRs modified within the previous twelve months of September 30, 2022 subsequently defaulted, prior to the adoption of ASU 2022-02.

The following table provides information related to the amortized cost basis of loan payment delinquencies at September 30, 2023 (in thousands):

delinquent 60-89 days

66 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 and the current period charge-offs by year of origination for each portfolio segment as of June 30, 2023 (in thousands):

YTD June 30, 2023 2022 2021 2020 2019 Prior Revolving loans Revolving loans converted to term loans Total loans

YTD September 30, 2023 2022 2021 2020 2019 Prior Revolving loans Revolving loans converted to term loans Total loans

Personal Banking:

41 unchanged sentences

Total loans $ 1,247,754 2,510,244 1,877,955 1,234,436 802,441 2,481,619 1,077,236 78,588 11,310,273

For the six months ended June 30, 2023, $ 10.0 million of revolving loans were converted to term loans.

For the nine months ended September 30, 2023, $ 13.7 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, 2022 (in thousands):

39 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Amortizable intangible assets:

6 unchanged sentences

Total intangible assets - net $ 6,013 8,560

The following table shows the actual aggregate amortization expense for the quarters ended June 30, 2023 and 2022, 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, 2023 $ 842

For the quarter ended June 30, 2022 1,115

For the six months ended June 30, 2023 1,751

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

The following table shows the actual aggregate amortization expense for the quarters ended September 30, 2023 and 2022, 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, 2023 $ 795

For the quarter ended September 30, 2022 1,047

For the nine months ended September 30, 2023 2,546

For the nine months ended September 30, 2022 3,345

For the year ending December 31, 2023 3,270

5 unchanged sentences

Balance at December 31, 2022 $ 380,997

Balance at June 30, 2023 $ 380,997

Balance at September 30, 2023 $ 380,997

We performed our annual goodwill impairment test as of June 30, 2023 in accordance with ASC 350 and concluded that goodwill was not impaired.

1 unchanged sentence

(a) Borrowings

Borrowed funds at June 30, 2023 and December 31, 2022 are presented in the following table:

June 30, 2023 December 31, 2022

Borrowed funds at September 30, 2023 and December 31, 2022 are presented in the following table:

September 30, 2023 December 31, 2022

Amount Average rate Amount Average rate

5 unchanged sentences

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

At June 30, 2023, the carrying value of these loans was $ 6.013 billion.

At September 30, 2023, the carrying value of these loans was $ 6.049 billion.

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

1 unchanged sentence

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

At June 30, 2023 and December 31, 2022, the balance of the revolving line of credit was $ 28.0 million and $ 51.3 million, respectively.

At June 30, 2023 and December 31, 2022, collateralized borrowings due within one year were $ 63.9 million and $ 105.8 million, respectively.

At September 30, 2023 and December 31, 2022, the balance of the revolving line of credit was $ 119.0 million and $ 51.3 million, respectively.

At September 30, 2023 and December 31, 2022, collateralized borrowings due within one year were $ 48.6 million and $ 105.8 million, respectively.

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

At June 30, 2023, the carrying value of the cash and securities used as collateral was $ 94.6 million.

At June 30, 2023 and December 31, 2022, collateral received was $ 40.5 million and $ 24.1 million, respectively.

At September 30, 2023, the carrying value of the cash and securities used as collateral was $ 89.3 million.

At September 30, 2023 and December 31, 2022, collateral received was $ 61.6 million and $ 24.1 million, respectively.

This represents collateral posted to us from our derivative counterparties.

At each of the periods ended June 30, 2023 and December 31, 2022, term notes payable to the FHLB of Pittsburgh due within one year were $ 500.0 million.

The June 30, 2023 total is made up of eight advances:

$ 100.0 million at 5.52 % maturing July 7, 2023;

$ 100.0 million at 5.37 % maturing July 14, 2023;

$ 100.0 million at 5.39 % maturing July 21, 2023;

$ 100.0 million at 5.39 % maturing July 28, 2023;

$ 25.0 million at 5.46 % maturing August 11, 2023;

$ 25.0 million at 5.45 % maturing August 14, 2023;

$ 25.0 million at 5.48 % maturing August 21, 2023;

and $ 25.0 million at 5.51 % maturing August 31, 2023.

At September 30, 2023 and December 31, 2022, term notes payable to the FHLB of Pittsburgh due within one year were $ 375.4 million and $ 500.0 million, respectively.

The September 30, 2023 total is made up of ten advances:

400,000 at 5.72 % maturing October 2, 2023;

$ 100.0 million at 5.65 % maturing October 6, 2023;

$ 100.0 million at 5.65 % maturing October 13, 2023;

$ 25.0 million at 5.63 % maturing October 26, 2023;

$ 25.0 million at 5.66 % maturing October 31, 2023;

$ 25.0 million at 5.63 % maturing November 9, 2023;

$ 25.0 million at 5.65 % maturing November 13, 2023;

$ 25.0 million at 5.62 % maturing November 14, 2023;

$ 25.0 million at 5.63 % maturing November 21, 2023;

and $ 25.0 million at 5.65 % maturing November 30, 2023.

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.

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 June 30, 2023 and December 31, 2022, subordinated debentures, net of issuance costs, were $ 114.0 million and $ 113.8 million, respectively.

At September 30, 2023 and December 31, 2022, subordinated debentures, net of issuance costs, were $ 114.1 million and $ 113.8 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 the date listed.

Maturity date Interest rate Capital debt securities June 30, 2023 December 31, 2022

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

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 (dollars in thousands).

Maturity date Interest rate Capital debt securities September 30, 2023 December 31, 2022

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

$ 50,000 $ 51,547 51,547

Northwest Bancorp Statutory Trust IV December 15, 2035 3-month LIBOR plus 1.38 %

Northwest Bancorp Statutory Trust IV December 15, 2035 3-month SOFR plus 1.38 %

50,000 51,547 51,547

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

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

7,875 8,119 8,119

Union National Capital Trust I (1) January 23, 2034 3-month LIBOR plus 2.85 %

Union National Capital Trust I (1) January 23, 2034 3-month SOFR plus 2.85 %

8,000 7,993 7,975

Union National Capital Trust II (1) November 23, 2034 3-month LIBOR plus 2.00 %

Union National Capital Trust II (1) November 23, 2034 3-month SOFR plus 2.00 %

3,000 2,789 2,768

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

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

5,000 3,762 3,684

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

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

5,000 3,752 3,674

9 unchanged sentences

All or part of the debentures may be redeemed at any time.

Also, the debentures

may be redeemed at any time if existing laws or regulations, or the interpretation or application of these laws or regulations, change causing:

Also, the debentures may be redeemed at any time if existing laws or regulations, or the interpretation or application of these laws or regulations, change causing:

• the interest on the debentures to no longer be deductible by the Company for federal income tax purposes;

10 unchanged sentences

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

At June 30, 2023, the maximum potential amount of future payments we could be required to make under these non-recourse standby letters of credit was $ 39.9 million, of which $ 26.3 million is fully collateralized.

At June 30, 2023, we had a liability which represents deferred income of $ 870,000 related to the standby letters of credit.

At September 30, 2023, the maximum potential amount of future payments we could be required to make under these non-recourse standby letters of credit was $ 45.9 million, of which $ 28.7 million is fully collateralized.

At September 30, 2023, we had a liability which represents deferred income of $ 1.0 million related to the standby letters of credit.

In addition, we maintain a $ 5.0 million unsecured line of credit with a correspondent bank for private label credit card facilities for certain existing commercial clients of the Bank, of which $ 3.4 million in notional value of credit cards have been issued.

These issued credit cards had an outstanding balance of $ 443,000 at June 30, 2023.

These issued credit cards had an outstanding balance of $ 578,000 at September 30, 2023.

The clients of the Bank are responsible for repaying any balances due on these credit cards directly to the correspondent bank;

4 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 June 30, Six months ended June 30,

Quarter ended September 30, Nine months ended September 30,

2023 2022 2023 2022

9 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 June 30,

Quarter ended September 30,

Pension benefits Other post-retirement benefits

6 unchanged sentences

Net periodic cost $ ( 218 ) 223 17 12

Six months ended June 30,

Nine months ended September 30,

Pension benefits Other post-retirement benefits

74 unchanged sentences

The fair value of the foreign exchange swap is derived from proprietary models rather than actual market quotations.

The proprietary models are based upon financial principles and assumptions we believe to be reasonable.

The proprietary models are based upon financial principles and assumptions that we believe to be reasonable.

Risk participation agreements are entered into when Northwest purchases a portion of a commercial loan that has an interest rate swap.

5 unchanged sentences

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

At June 30, 2023 and December 31, 2022, 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, 2023 (in thousands):

At September 30, 2023 and December 31, 2022, 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 September 30, 2023 (in thousands):

amount Estimated

8 unchanged sentences

Interest rate lock commitments 664 664 — — 664

Forward commitments 101 101 — 101 —

Foreign exchange swaps 203 203 — 203 —

9 unchanged sentences

Junior subordinated debentures 129,509 136,461 — — 136,461

Forward commitments 23 23 — 23 —

Foreign exchange swaps 10 10 — 10 —

30 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 June 30, 2023 and December 31, 2022.

The following table represents assets and liabilities measured at fair value on a recurring basis at June 30, 2023 (in thousands):

The methods and assumptions detailed above were used in estimating the fair value of financial instruments at both September 30, 2023 and December 31, 2022.

The following table represents assets and liabilities measured at fair value on a recurring basis at September 30, 2023 (in thousands):

Level 1 Level 2 Level 3 Total assets

17 unchanged sentences

Interest rate lock commitments — — 664 664

Forward commitments — 101 — 101

Foreign exchange swaps — 203 — 203

2 unchanged sentences

Total assets $ — 1,072,131 664 1,072,795

Forward commitments $ — 23 — 23

Foreign exchange swaps — 10 — 10

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

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

2023 2022 2023 2022

4 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 June 30, 2023 (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 September 30, 2023 (in thousands):

Level 1 Level 2 Level 3 Total assets

23 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 June 30, 2023 (in thousands):

Fair value Valuation techniques Significant

14 unchanged sentences

Derivatives Designated as Hedging Instruments

During May 2023, the Company entered into four separate pay-fixed interest rate swaps in order to synthetically convert short-term three month FHLB advances to fixed-rate term funding with an aggregate value of $ 100 million with maturities ranging from three to five years .

As of September 30, 2023, the Company has entered into seven 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 $ 175 million with maturities ranging 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-SOFR swap rate, the designated benchmark interest rate being hedged.

Based upon our contemporaneous quantitative analysis at the inception of the interest rate swaps, we have determined these interest rate swaps qualifies for hedge accounting in accordance with ASC 815, Derivatives and Hedging .

Based upon our contemporaneous quantitative analysis at the inception of the interest rate swaps, we have determined these interest rate swaps qualify for hedge accounting in accordance with ASC 815, Derivatives and Hedging .

Our cash flow hedges are recorded within other assets on the Consolidated Statement of Financial Condition at their estimated fair value.

As long as the hedge remains highly effective the 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.

As long as the hedge remains highly effective, the changes in the fair value of derivatives designated, and that qualify, as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

A hedging relationship that is determined to not be highly effective no longer qualifies for hedge accounting and any gain or loss is recognized immediately into earnings.

21 unchanged sentences

Notional amount Fair value Notional amount Fair value

At June 30, 2023

Derivatives designed as hedging instruments:

At September 30, 2023

Derivatives designated as hedging instruments:

Interest rate swap agreements $ 175,000 4,603 — —

15 unchanged sentences

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

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

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

2023 2022 2023 2022

2 unchanged sentences

Non-hedging swap derivatives:

(Decrease)/increase in other income $ ( 128 ) 53 ( 330 ) 114

Increase/(decrease) in mortgage banking income $ 349 ( 96 ) 176 322

The following table presents information regarding our derivative financial instruments designated as hedging for the quarter ended June 30, 2023 (in thousands):

Notional amount Effective rate Estimated increase/(decrease) to interest expense in the next twelve months Maturity date Remaining term

Increase/(decrease) in other income $ 203 93 ( 127 ) 207

(Decrease)/increase in mortgage banking income $ ( 221 ) 809 ( 46 ) 1,131

The following table presents information regarding our derivative financial instruments designated as hedging for the quarter ended September 30, 2023 (in thousands):

Notional amount Effective rate Estimated decrease to interest expense in the next twelve months Maturity date Remaining term

Interest rate products:

3 unchanged sentences

Issued May 31, 2023 25,000 4.08 % ( 400 ) 11/30/2026 38

Issued July 26, 2023 25,000 4.24 % ( 348 ) 7/26/2028 58

Issued July 31, 2023 25,000 4.36 % ( 330 ) 1/31/2028 52

Issued August 9, 2023 25,000 4.32 % ( 333 ) 8/9/2027 46

Total $ 175,000 $ ( 2,933 )

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 June 30, 2023, 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 September 30, 2023, 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

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

For the quarter ended June 30, 2023

For the quarter ended September 30, 2023

on securities

3 unchanged sentences

pension plans Total

Balance as of March 31, 2023 $ ( 151,189 ) — ( 7,334 ) ( 158,523 )

Balance as of June 30, 2023 $ ( 163,272 ) 1,737 ( 7,716 ) ( 169,251 )

Other comprehensive (loss)/income before reclassification adjustments (1) (2) ( 29,715 ) 1,825 — ( 27,890 )

1 unchanged sentence

Net other comprehensive (loss)/income ( 29,715 ) 1,825 ( 382 ) ( 28,272 )

Balance as of June 30, 2023 $ ( 163,272 ) 1,737 ( 7,716 ) ( 169,251 )

For the quarter ended June 30, 2022

Balance as of September 30, 2023 $ ( 192,987 ) 3,562 ( 8,098 ) ( 197,523 )

For the quarter ended September 30, 2022

on securities

2 unchanged sentences

pension plans Total

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

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

Other comprehensive loss before reclassification adjustments (4) ( 48,387 ) — ( 48,387 )

Amounts reclassified from accumulated other comprehensive income (5) — ( 131 ) ( 131 )

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

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

Net other comprehensive loss ( 48,387 ) ( 131 ) ( 48,518 )

Balance as of September 30, 2022 $ ( 165,443 ) ( 25,705 ) ( 191,148 )

(1) Consists of unrealized holding losses, net of tax of $ 9,140 .

(2) Consists of realized losses, net of tax of ($ 1,731 ).

(2) Change in fair value of interest rate swaps, net of tax ($ 533 ).

1 unchanged sentence

(4) Consists of unrealized holding losses, net of tax $ 14,705 .

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

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

For the six months ended June 30, 2023

gains and losses

For the nine months ended September 30, 2023

on securities

7 unchanged sentences

Net other comprehensive income/(loss) ( 28,781 ) 3,562 ( 1,146 ) ( 26,365 )

Balance as of June 30, 2023 $ ( 163,272 ) 1,737 ( 7,716 ) ( 169,251 )

For the six months ended June 30, 2022

Balance as of September 30, 2023 $ ( 192,987 ) 3,562 ( 8,098 ) ( 197,523 )

For the nine months ended September 30, 2022

on securities

3 unchanged sentences

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

Other comprehensive (loss)/income before reclassification adjustments (5) ( 104,737 ) — ( 104,737 )

Other comprehensive loss before reclassification adjustments (5) ( 153,124 ) — ( 153,124 )

Amounts reclassified from accumulated other comprehensive income (6) (7) ( 2 ) ( 393 ) ( 395 )

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

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

Net other comprehensive loss ( 153,126 ) ( 393 ) ( 153,519 )

Balance as of September 30, 2022 $ ( 165,443 ) ( 25,705 ) ( 191,148 )

(1) Consists of unrealized holding losses, net of tax of $ 9,603 .

3 unchanged sentences

(5) Consists of unrealized holding losses, net of tax $ 45,555 .

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

(6) Consists of realized losses, net of tax $ 0 .

(7) Consists of realized gains, net of tax of $ 151 .

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