What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-23 compared with 2023-02-24 · 419 added, 397 removed, 2242 unchanged (27% of the section changed)

15 unchanged sentences

and subsidiaries ’ (the Company) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in I nternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial condition of the Company as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements), and our report dated February 23, 2024 expressed an unqualified opinion on those consolidated financial statements.

43 unchanged sentences

Allowance for credit losses for loans evaluated on a collective basis

As discussed in Notes 1 and 4 to the consolidated financial statements, the Company’s allowance for credit losses for loans held for investment was $118.0M as of December 31, 2022, a portion of which included the measurement of expected credit losses on a collective (pool) basis for those loans that share similar risk characteristics (the collective ACL).

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

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

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

(1) the allowance for credit losses within the mortgage, home equity, and vehicle loan portfolios are calculated at the loan-level using projected default, prepayment, and severity rates as well as macroeconomic forecasts determined at the pool level;

(2) the allowance for credit losses for the commercial real estate small business and commercial small business loan portfolios are calculated at the portfolio-level using a regression model to project portfolio-level net charge-off rates as well as macroeconomic forecasts determined at the pool level;

and (3) the allowance for credit losses for the commercial real estate and commercial loan portfolios are calculated at the loan-level using projected default and severity rates as well as macroeconomic forecasts determined at the pool level.

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

historical loss information.

As discussed in Notes 1 and 5 to the consolidated financial statements, the Company’s allowance for credit losses for loans held for investment was $125.2 million as of December 31, 2023, a portion of which included the measurement of expected credit losses on a collective (pool) basis for those loans that share similar risk characteristics.

The expected credit loss methodologies incorporate probability of default (PD) and loss given default (LGD) models to determine a PD and LGD loss assumption which is applied to loan level exposures on an undiscounted basis over the contractual term of the loans, adjusted for prepayments, certain of which use a prepayment model.

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

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

(1) the allowance for credit losses within the residential mortgage and home equity loan portfolios are calculated using a PD, LGD and prepayment model adjusted for asset specific characteristics at the loan-level using projected default rates, prepayment rates, and severity rates as well as macroeconomic forecasts determined at the pool level;

(2) the allowance for credit losses within the vehicle loan portfolio is calculated using a PD, LGD and prepayment model adjusted for asset specific characteristics at the loan-level using projected default rates and prepayment rates, as well as macroeconomic forecasts determined at the pool level;

(3) the allowance for credit losses for commercial real estate small business and commercial small business loan portfolios are calculated using PD and LGD models at the borrower-level using both a regression model and a fractional logit model, as well as macroeconomic forecasts and expected prepayment rates at the pool level;

and (4) the allowance for credit losses for the commercial real estate and commercial loan portfolios are calculated using PD and LGD models at the pool-level using projected

default and severity rates as well as macroeconomic forecasts and expected prepayment rates determined at the pool level.

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

These adjustments are based on qualitative factors not reflected in the quantitative models but are likely to impact the measurement of estimated credit losses.

We identified the assessment of the collective ACL as a critical audit matter.

We identified the assessment of the expected credit losses on a collective basis for all loans, except for consumer loans (the collective ACL) as a critical audit matter.

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

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

Specifically, the assessment encompassed the evaluation of the collective ACL methodologies, including the (1) PD, LGD and prepayment models and their significant assumptions, including the selection and weighting of the macroeconomic forecasts, and the reasonable and supportable forecast period, (2) adjustment for asset specific risk characteristics for residential mortgage, home equity and vehicle loans and (3) the qualitative factors and their significant assumptions.

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

3 unchanged sentences

• development of the collective ACL methodologies

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

• development of the small business banking PD, LGD and prepayment models

• continued use and conceptual soundness of the PD, LGD and prepayment models

• performance monitoring of the models

6 unchanged sentences

generally accepted accounting principles

• evaluating judgments made by the Company relative to the development and performance testing of the model assumptions by comparing them to relevant Company-specific metrics and trends and the applicable industry and regulatory practices

• evaluating judgments made by the Company relative to the development and performance testing of the model assumptions, inclusive of the metrics used for asset-specific risk characteristics for the mortgage, home equity, and vehicle models, by comparing them to relevant Company-specific metrics and trends and the applicable industry and regulatory practices

• assessing the conceptual soundness and performance testing of the model assumptions by inspecting the model documentation to determine whether the models are suitable for their intended use

• evaluating the economic forecast scenarios and underlying assumptions by comparing it to the Company’s business environment and relevant industry practices

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

• evaluating the selection and weighting of the macroeconomic forecasts, by comparing it to the Company’s business environment and relevant industry practices

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

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

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

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

We have served as the Company’s auditor since 1963.

63 unchanged sentences

Net interest income 435,683 420,681 391,262

Provision for credit losses 17,860 ( 11,883 ) 83,975

Provision for credit losses - loans 18,664 17,860 ( 11,883 )

Provision for credit losses - unfunded commitments (1) 4,210 10,455 ( 3,905 )

Net interest income after provision for credit losses 412,809 392,366 407,050

Noninterest income:

(Loss)/gain on sale of investments ( 8 ) ( 176 ) 236

Loss on sale of investments ( 8,307 ) ( 8 ) ( 176 )

Gain on sale of mortgage servicing rights 8,305 — —

Gain on sale of SBA loans 1,800 — —

Gain on sale of loans 726 — —

2 unchanged sentences

Insurance commission income — — 3,633

Gain/(loss) on real estate owned, net 603 442 ( 106 )

Gain on real estate owned, net 2,006 603 442

Income from bank-owned life insurance 8,588 7,129 6,050

25 unchanged sentences

Diluted earnings per share $ 1.06 1.05 1.21

(1) Reclassified from other expenses for periods prior to December 31, 2023

See accompanying notes to Consolidated Financial Statements.

7 unchanged sentences

Other comprehensive income net of tax:

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

Unrealized holding (losses)/gains, net of tax of $ 45,321 , $ 10,333 , and $( 5,607 ), respectively

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

Unrealized holding gains/(losses), net of tax of $( 3,429 ), $ 45,321 , and $ 10,333 , respectively

7,875 ( 151,888 ) ( 28,873 )

Reclassification adjustment for gains included in net income, net of tax of $ 0 , $ 92 , and $ 6 , respectively

Reclassification adjustment for losses/(gains) included in net income, net of tax of ($ 1,700 ), $ 0 , and $ 92 , respectively

5,672 ( 1 ) ( 287 )

Net unrealized holding (losses)/gains on marketable securities ( 151,889 ) ( 29,160 ) 13,696

Change in fair value of interest rate swaps:

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

Reclassification adjustment for losses included in net income, net of tax of $ 0 , $ 0 , and $( 209 ), respectively

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

Net unrealized holding gains/(losses) on marketable securities 13,547 ( 151,889 ) ( 29,160 )

Change in fair value of interest rate swaps, net of tax of $ 110 , $ 0 , and $ 0 , respectively

Defined benefit plan:

Net gain/(loss), net of tax $( 7,182 ), $( 9,144 ), $ 4,169 , respectively

Net gain, net of tax $( 3,961 ), $( 7,182 ), $( 9,144 ), respectively

10,019 18,884 23,748

1 unchanged sentence

( 1,526 ) ( 524 ) 1,332

Net gain/(loss) on defined benefit plans 18,360 25,080 ( 10,304 )

Other comprehensive (loss)/income ( 133,529 ) ( 4,080 ) 3,392

Net gain on defined benefit plans 8,493 18,360 25,080

Other comprehensive income/(loss) 21,666 ( 133,529 ) ( 4,080 )

Total comprehensive income $ 156,623 137 150,243

16 unchanged sentences

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

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

Reclassification due to adoption of ASU No.

2016-13 — — ( 9,649 ) — ( 9,649 )

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

2 unchanged sentences

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

Other — 105 — — 105

Dividends paid ($ 0.79 per share)

7 unchanged sentences

Exercise of stock options 4 5,169 — — 5,173

Share repurchases ( 18 ) ( 23,836 ) — — ( 23,854 )

Stock-based compensation expense 1 4,073 — — 4,074

8 unchanged sentences

Total comprehensive income — — 134,957 21,666 156,623

Adoption of ASU No.

2022-02 — — ( 329 ) — ( 329 )

Exercise of stock options 1 629 — — 630

15 unchanged sentences

Provision for credit losses 22,874 28,315 ( 15,788 )

Net (gain)/loss on sale of assets 42 ( 1,201 ) ( 3,249 )

Loss on sale of investments 8,307 — —

Net loss/(gain) on sale of assets 2,117 42 ( 1,201 )

Mortgage banking activity ( 895 ) ( 3,512 ) ( 20,120 )

Gain on sale of SBA loans ( 1,754 ) — —

Gain on sale of mortgage servicing rights ( 8,305 ) — —

Gain on sale of loans ( 726 ) — —

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

12 unchanged sentences

Purchase of marketable securities available-for-sale ( 23,502 ) ( 102,178 ) ( 705,146 )

Proceeds from maturities and principal reductions of marketable securities held-to-maturity 98,701 68,495 3,760

Proceeds from maturities and principal reductions of marketable securities available-for-sale 231,728 449,372 392,511

Proceeds from maturities and principal reductions of marketable securities

held-to-maturity 65,588 98,701 68,495

Proceeds from maturities and principal reductions of marketable securities

available-for-sale 103,424 231,728 449,372

Proceeds from sale of marketable securities available-for-sale 101,229 — 59,579

Proceeds of bank-owned life insurance 5,096 3,984 596

Proceeds from bank-owned life insurance 13,307 5,096 3,984

Proceeds from sale of mortgage servicing rights 13,118 — —

Loan originations ( 3,963,743 ) ( 4,585,563 ) ( 3,961,816 )

1 unchanged sentence

Proceeds from loan maturities and principal reductions 3,446,731 4,047,147 4,490,089

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

Net (proceeds)/redemptions of FHLB stock ( 25,959 ) 7,564 6,107

Net redemptions/(proceeds) of FHLB stock 9,997 ( 25,959 ) 7,564

Proceeds from sale of real estate owned 2,735 1,633 2,700

2 unchanged sentences

Proceeds from sale of insurance business — — 28,238

Acquisitions, net of cash received — — 261,712

Net cash used in investing activities ( 239,680 ) ( 917,423 ) ( 232,970 )

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022, 2021 and 2020

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

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

3 unchanged sentences

Financing activities:

Net (decrease)/increase in deposits $ ( 836,617 ) 701,932 1,390,187

Proceeds from long-term borrowings — — 123,211

Net increase/(decrease) in deposits $ 515,354 ( 836,617 ) 701,932

Repayments of long-term borrowings — ( 10,094 ) ( 22,105 )

Net increase/(decrease) in short-term borrowings 542,073 1,432 ( 108,675 )

Increase/(decrease) in advances by borrowers for taxes and insurance 3,031 ( 648 ) ( 1,315 )

Net (decrease)/increase in short-term borrowings ( 282,270 ) 542,073 1,432

(Decrease)/increase in advances by borrowers for taxes and insurance ( 2,360 ) 3,031 ( 648 )

Cash dividends paid on common stock ( 101,669 ) ( 101,468 ) ( 100,274 )

1 unchanged sentence

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

Net cash (used)/provided by financing activities ( 397,902 ) 570,494 1,095,571

Net cash provided by/(used in) financing activities 129,685 ( 397,902 ) 570,494

Net (decrease)/increase in cash and cash equivalents $ ( 17,105 ) ( 1,139,894 ) 542,982

3 unchanged sentences

Cash paid during the period for:

Interest on deposits and borrowings (including interest credited to deposit accounts of

$ 13,399 , $ 18,711 , and $ 34,313 , respectively)

Interest on deposits and borrowings (including interest credited to deposit accounts of $ 86,316 , $ 13,399 , and $ 18,711 , respectively)

$ 141,801 26,690 27,496

Income taxes 47,996 39,365 33,576

Business acquisitions:

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

Northwest Bancshares, Inc.

common stock issued — — ( 213,406 )

Net cash paid — — —

Liabilities assumed $ — — 1,877,193

Noncash activities:

6 unchanged sentences

December 31, 2023, 2022 and 2021

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

(1) Summary of Significant Accounting Policies

1 unchanged sentence

Northwest Bancshares, Inc., a Maryland corporation headquartered in Columbus, Ohio, is the b ank holding company for its wholly owned subsidiary, Northwest Bank.

Northwest Bank, a Pennsylvania chartered savings bank, offering a complete line of business and personal banking products, as well as treasury management solutions and wealth management services through its 150 banking locations in Pennsylvania, New York, Ohio, and Indiana.

Northwest Bank, a Pennsylvania chartered savings bank, offers a complete line of business and personal banking products, as well as treasury management solutions and wealth management services through its 142 banking locations in Pennsylvania, New York, Ohio, and Indiana.

We have determined that we have one reportable business segment.

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December 31, 2023, 2022 and 2021

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

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

5 unchanged sentences

The receivable for interest income that is accrued but not collected is reversed against interest income when the debt security is placed on nonaccrual status.

No debt securities were on nonaccrual status as of December 31, 2023 and December 31, 2022.

(e) Loans Receivable

21 unchanged sentences

Nonaccrual loans generally are restored to an accrual basis when principal and interest become current and a period of performance has been established in accordance with the contractual terms, typically six months .

A loan is considered to be a troubled debt restructuring loan (“TDR”) when the borrower is experiencing financial difficulties and the restructuring constitutes a concession.

TDRs may include modifications of terms of loans, receipts of assets from borrowers in partial or full satisfaction of loans, or a combination thereof.

A modified loan is determined to be a TDR based on the contractual

Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extensions, an other-than-insignificant payment delay, or interest rate reduction.

When principal forgiveness is provided, the amount of forgiveness is charged off against the allowance for credit losses.

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

terms as specified by the original loan agreement or the most recent modification.

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

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

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

3 unchanged sentences

Loan fees and certain direct loan origination costs are deferred and the net deferred fee or cost is then recognized using the level-yield method over the contractual life of the loan as an adjustment to interest income.

We identify certain residential mortgage loans which will be sold prior to maturity, as loans held-for-sale.

We identify certain residential mortgage loans and small business administration guaranteed loans which will be sold prior to maturity, as loans held-for-sale.

These loans are recorded at fair value less estimated cost to sell.

At December 31, 2022 and 2021, there were $ 9.9 million and $ 25.1 million of residential mortgage loans classified as held-for-sale, respectively.

At December 31, 2023 and 2022, there were $ 8.8 million and $ 9.9 million of loans classified as held-for-sale, respectively.

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

14 unchanged sentences

Expected credit losses are estimated over the contractual term of the loans, adjusted for prepayments.

The contractual term excludes expected extensions, renewals and modifications unless we had a reasonable expectation at the reporting date that a TDR will be executed for an individual borrower or the extension or renewal option is included in the contract and is not unconditionally cancellable by the Company.

The contractual term excludes expected extensions, renewals and modifications or the extension or renewal option is included in the contract and is not unconditionally cancellable by the Company.

Credit card receivables do not have stated maturities.

5 unchanged sentences

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

The reasonable and supportable forecast is based on a

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022, 2021 and 2020

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

probability-weighted multiple economic scenario approach and obtained from a third party vendor.

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

Reversion to the mean takes place over a twelve-month period.

2 unchanged sentences

Historical average loss rates are calculated using historica l data beginning in 2009 through the current period.

As part of the analysis as of December 31, 2022, we considered the most recent economic conditions and forecasts available.

As part of the analysis as of December 31, 2023, we considered the most recent macroeconomic forecasts available.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023, 2022 and 2021

Mortgage and Home Equity Loans

The allowance for credit losses within the mortgage and home equity loan pools is calculated using a non-discounted cash flow method through a PD and LGD model developed by an external third-party.

The allowance for credit losses within the mortgage and home equity loan pools is calculated using a non-discounted cash flow method through a PD, LGD, and prepayment model developed by an external third-party and adjusted for asset specific characteristics.

These classes are further divided into smaller pools of loans with similar risk characteristics such as:

5 unchanged sentences

Vehicle Loans

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

The allowance for credit losses within the vehicle loan pool is calculated using a non-discounted cash flow model through a PD, LGD, and prepayment model developed by an external third-party and adjusted for asset specific risk characteristics.

These classes are further divided into smaller pools of loans with similar risk characteristics such as:

8 unchanged sentences

Both models use current balance and delinquency status as key risk drivers.

These models are not natively sensitive to macroeconomic conditions.

These models are not natively sensitive to macroeconomic forecasts.

The necessary adjustments to account for current and expected macroeconomic conditions is captured via our qualitative adjustment framework.

8 unchanged sentences

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

The allowance for credit losses is calculated for commercial real estate small business loans at the portfolio-level using a non-discounted cash flow method through a loss rate model developed internally with the assistance of an external third-party.

The allowance for credit losses for commercial real estate small business portfolio is calculated at a borrower-level with a PD/LGD model.

Separate models were built by industry segment.

Each model was built with a logistic regression model except for the U.S.

Small Business Administration (SBA) and Agriculture sub-portfolios.

For SBA, a portfolio-level fractional logit model was developed;

the small Agriculture segment uses a simple long-run average loss rate.

The LGD model is assumption-based and assigns varying LGDs by industry segment.

The models ’ overall key inputs are borrower and collateral characteristics and macroeconomic forecasts including real GDP, unemployment, home price appreciation, and real disposable personal income.

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

regression model is used to project portfolio-level net charge-off rates.

This model uses loan characteristics and macroeconomic forecasts as key inputs.

Commercial Loans and Commercial Real Estate - Owner Occupied Loans

The commercial loan class is further segmented into smaller pools of loans with similar risk characteristics, commercial loans, commercial small business loans and commercial equipment finance loans.

The commercial loan class is further segmented into smaller pools of loans with similar risk characteristics, commercial loans and commercial small business loans, including equipment finance loans.

The allowance for credit losses for the commercial loan portfolio and the commercial real estate - owner occupied loan portfolio is calculated at the pool level using a non-discounted cash flow method through a PD/LGD model developed by an external third-party.

2 unchanged sentences

It also utilizes macroeconomic forecasts of unemployment rates, gross domestic product, corporate bond spreads, and others.

The allowance for credit losses for commercial small business loans is calculated at the portfolio-level using a non-discounted cash flow method through a loss rate model developed internally with the assistance of an external third-party.

A regression model is used to project portfolio-level net charge-off rates.

This model uses loan characteristics and macroeconomic forecasts as key inputs.

The allowance for credit losses for commercial equipment finance loans is calculated at the portfolio-level using a weighted-average remaining maturity method through an internally developed model.

This model uses loan characteristics including, delinquency status and years to maturity.

This model is not natively sensitive to macroeconomic conditions.

The necessary adjustments to account for current and expected macroeconomic conditions is captured via our qualitative adjustment framework.

The allowance for credit losses for commercial small business loans is calculated at a borrower-level with a PD/LGD model.

Separate models were built by industry segment.

Each model was built with a logistic regression model except for the U.S.

Small Business Administration (SBA) and Agriculture sub-portfolios.

For SBA, a portfolio-level fractional logit model was developed;

the small Agriculture segment uses a simple long-run average loss rate.

The LGD model is assumption-based and assigns varying LGDs by industry segment.

Loans that do not share risk characteristics are evaluated on an individual basis.

4 unchanged sentences

The allowance calculation is also supplemented with qualitative reserves that takes into consideration the current portfolio and specific risk characteristics, such as changes in underwriting standards, portfolio mix, delinquency level, or term, as well as changes in environmental conditions, among other factors, that have occurred but are not yet reflected in the quantitative model component.

The allowance for credit losses on a TDR is measured using the same method as all other loans held for investment, except when the value of the concession cannot be measured using a method other than the discounted cash flow method.

When the value of a concession is measured using the discounted cash flow method, the allowance for credit losses is determined by discounting the expected future cash flows at the original interest rate of the loan.

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 allowance models to arrive at the quantitative portion of the allowance for credit losses.

Subsequent performance of the loans will be measured by delinquency status and will be captured through our models or our qualitative factor assessment, as deemed appropriate.

If we no longer believe the loan demonstrates similar risks to their respective portfolio segment, an individual assessment will be performed.

Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off.

Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

For off-balance-sheet credit exposures, we estimate expected credit losses over the contractual period in which we are exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable.

The liability for credit losses on off-balance-sheet credit exposures is adjusted through a provision for credit loss expense and is included within other expense on the Consolidated Statements of Income.

The liability for credit losses on off-balance-sheet credit exposures is adjusted through a provision for credit loss - unfunded commitments expense on the Consolidated Statements of Income.

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

5 unchanged sentences

Any initial write-down is charged to the allowance for credit losses.

Subsequently, foreclosed assets are valued at the lower of the amount recorded at acquisition date or the current fair value, less

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

Subsequently, foreclosed assets are valued at the lower of the amount recorded at acquisition date or the current fair value, less estimated disposition costs.

estimated disposition costs.

Any subsequent write-down or gains or losses realized from the disposition of such property are credited or charged to noninterest income.

25 unchanged sentences

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

There were no changes in our operations that would cause us to update the assessment performed as of June 30, 2022 and 2021.

There were no events or changes in circumstance in our operations that would cause us to update the assessment performed as of June 30, 2023 and 2022.

Accordingly, we have determined that goodwill is not impaired as of December 31, 2023 and 2022.

9 unchanged sentences

December 31, 2023, 2022 and 2021

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

(l) Bank-Owned Life Insurance

35 unchanged sentences

December 31, 2023, 2022 and 2021

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

otherwise disposed of and are required to be held in a trust.

6 unchanged sentences

Treasury securities of a similar maturity to the expected term of the options.

During the year ended December 31, 2022, we awarded no stock options to employees or directors.

During the years ended December 31, 2023 and 2022 we awarded no stock options to employees or directors.

New shares are issued when options are exercised.

16 unchanged sentences

Any gain or loss is recognized immediately in earnings.

We act as an interest rate or foreign exchange swap counterparty for certain commercial borrowers in the normal course of servicing our customers, which are accounted for at fair value.

We manage our exposure to such interest rate or foreign exchange swaps by entering into corresponding and offsetting interest rate swaps with third parties that mirror the terms of the swaps we have with the commercial borrowers.

These positions (referred to as “customer swaps”) directly offset each other and our exposure is the fair value of the derivatives due to changes in credit risk of our commercial borrowers and third parties.

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.

(s) Off-Balance-Sheet Instruments

4 unchanged sentences

Operating lease right of use (“ROU ” ) assets represent our right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease.

ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments.

ROU assets are further adjusted for lease incentives and initial direct costs.

The Company has operating leases for certain branch and office facilities or land with lease terms up to 35 years.

These leases generally contain renewal options for periods ranging from one to ten years .

These options are included in the lease term when it is reasonably certain that the options will be exercised.

ROU assets and operating

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments.

ROU assets are further adjusted for lease incentives and initial direct costs.

The Company has operating leases for certain branch and office facilities or land with lease terms up to 35 years.

These leases generally contain renewal options for periods ranging from one to ten years .

These options are included in the lease term when it is reasonably certain that the options will be exercised.

Some of the Company’s lease arrangements contain lease components (e.g., minimum rent payments) and non-lease components (e.g., common area maintenance, taxes, etc.).

14 unchanged sentences

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

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 years ended December 31, 2022 and December 31, 2021, to reclassify the provision for credit losses - unfunded commitments, previously presented in other expense, to provide additional transparency to financial statement users.

(2) Recently Adopted Accounting Standards

In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2022-02, “Financial Instruments - Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosure.” This ASU eliminates the accounting guidance for troubled debt restructurings (“TDRs”), while enhancing disclosure requirements for certain loan modifications when a borrower is experiencing financial difficulty.

This ASU also requires the disclosure of current period gross write-offs by year for origination for financing receivables.

This guidance is effective for annual periods beginning after December 15, 2022, including interim periods within those years, with early adoption permitted.

This ASU is applied prospectively to modifications and write-offs beginning on the first day of the fiscal year of adoption.

An entity may elect to adopt a modified retrospective transition method on the recognition and measurement of the TDR guidance.

We adopted ASU 2022-02 using a modified retrospective transition approach related to the recognition and measurement of the TDR guidance and on a prospective basis for modification and write-offs.

As a result, the Company was not required to adjust its comparative period financial information for effects of the standard or make the new required ASU 2022-02 disclosure for periods before the date of adoption (i.e.

January 1, 2023).

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

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.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023, 2022 and 2021

guidance provides expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met.

The amendments primarily include contract modifications and hedge accounting, as well as providing a one-time election for the sale or transfer of debt securities classified as held-to-maturity.

This guidance was effective as of March 12, 2020 through December 31, 2022.

In December 2022, the FASB issued ASU No.

2022-06, “Reference Rate Reform (Topic 848):

Deferral of the Sunset Date to Topic 848”.

This guidance extends the guidance of ASU 2022-04 from December 31, 2022 to December 31, 2024.

In January 2021, the FASB issued ASU No.

2021-01, “Reference Rate Reform.” This ASU provides amendments, which are elective, and apply to all entities that have derivative instruments that use an interest rate for margining, discounting or contract price alignment of certain derivative instruments that are modified as a result of the reference rate reform.

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

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.

There was no material impact to the Company’s financial statements as a result of the transition.

Lease expense for these leases is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred.

10 unchanged sentences

Operating lease liabilities (other liabilities) 64,723 57,737

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022, 2021 and 2020

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

Other information related to leases were as follows:

6 unchanged sentences

Weighted average discount rate 4.2 % 3.2 %

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023, 2022 and 2021

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

6 unchanged sentences

Rental expense for the years ended December 31, 2023, 2022 and 2021 was $ 7.4 million , $ 6.9 million and $ 6.5 million, respectively.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022, 2021 and 2020

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

(4) Marketable Securities

11 unchanged sentences

Municipal securities:

Due within one year 506 — ( 1 ) 505

Due after one year through five years 4,279 22 ( 427 ) 3,874

10 unchanged sentences

Total marketable securities available-for-sale $ 1,240,003 223 ( 196,867 ) 1,043,359

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023, 2022 and 2021

Marketable securities held-to-maturity at December 31, 2023 are as follows:

2 unchanged sentences

holding losses Fair value

Debt issued by the U.S.

government and agencies:

Debt issued by government-sponsored enterprises:

Due after one year through five years $ 69,471 — ( 8,100 ) 61,371

7 unchanged sentences

Total marketable securities held-to-maturity $ 814,839 1 ( 115,334 ) 699,506

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022, 2021 and 2020

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

Marketable securities available-for-sale at December 31, 2022 are as follows:

7 unchanged sentences

Debt issued by government-sponsored enterprises:

Due within one year 177 — — 177

Due after one year through five years 993 — ( 49 ) 944

5 unchanged sentences

Due after ten years 89,631 8 ( 13,414 ) 76,225

Corporate debt issues:

Due after five years through ten years 13,540 — ( 562 ) 12,978

Residential mortgage-backed securities:

5 unchanged sentences

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

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023, 2022 and 2021

Marketable securities held-to-maturity at December 31, 2022 are as follows:

21 unchanged sentences

Total residential mortgage-backed securities $ 1,030,016 861,291

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022, 2021 and 2020

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

The following table shows the contractual maturity of our residential mortgage-backed securities held-to-maturity at December 31, 2023:

13 unchanged sentences

Marketable securities having a carrying value of $ 368.5 million at December 31, 2023 were pledged under collateral agreements.

During the year ended December 31, 2022, there were no sold marketable securities classified as available-for-sale.

During the year ended December 31, 2023, we sold marketable securities classified as available-for-sale for $ 101.2 million, with gross realized gains of $ 9,000 and gross realized losses of $ 8.3 million.

During the year ended December 31, 2022, there were no sales of marketable securities classified as available-for-sale.

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

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

During the years ended December 31, 2022, 20 21 and 2020, we did no t recognize allowance for credit losses in our investment portfolio.

During the years ended December 31, 2023, 2022, and 20 21, we did no t recognize an allowance for credit losses in our investment portfolio.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023, 2022 and 2021

The following table shows the fair value 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 December 31, 2023:

6 unchanged sentences

Municipal securities 2,753 ( 81 ) 66,046 ( 10,363 ) 68,799 ( 10,444 )

Residential mortgage-backed securities 373,186 ( 22,796 ) 1,264,042 ( 262,515 ) 1,637,228 ( 285,311 )

Residential mortgage-backed securities - agency 17,976 ( 242 ) 1,423,707 ( 267,093 ) 1,441,683 ( 267,335 )

Total temporarily impaired securities $ 20,729 ( 323 ) 1,704,010 ( 311,878 ) 1,724,739 ( 312,201 )

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

The following table shows the fair value and gross unrealized losses on investment securities 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 December 31, 2022:

Less than 12 months 12 months or more Total

3 unchanged sentences

government-sponsored enterprises $ 1,735 ( 82 ) 200,679 ( 41,917 ) 202,414 ( 41,999 )

Corporate debt issues 12,979 ( 562 ) — — 12,979 ( 562 )

Municipal securities 60,676 ( 4,047 ) 44,493 ( 11,671 ) 105,169 ( 15,718 )

Residential mortgage-backed securities 1,428,582 ( 26,516 ) 184,389 ( 7,217 ) 1,612,971 ( 33,733 )

Residential mortgage-backed securities - agency 373,186 ( 22,796 ) 1,264,042 ( 262,515 ) 1,637,228 ( 285,311 )

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

3 unchanged sentences

government-sponsored enterprises, local municipalities, or represent corporate debt.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022, 2021 and 2020

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

The securities issued by the U.S.

19 unchanged sentences

Total marketable securities held-to-maturity $ 814,839 814,839

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023, 2022 and 2021

(5) Loans Receivable

21 unchanged sentences

During the year ended December 31, 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.

No loans were purchased during the year ended December 31, 2023.

As of December 31, 2023 and 2022, we serviced loans for others approximating $ 230.8 million and $ 1.549 billion, respectively.

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

As of December 31, 2023 and 2022, approximately 38 % and 41 % of our loan portfolio was secured by properties located in Pennsylvania.

We do not believe we have significant concentrations of credit risk to any one group of borrowers given our underwriting and collateral requirements.

Loans receivable as of December 31, 2023 and 2022 include $ 4.032 billion and $ 3.333 billion, respectively, of adjustable rate loans and $ 7.314 billion and $ 7.511 billion, respectively, of fixed rate loans.

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

As of December 31, 2022 and 2021, we serviced loans for others approximating $ 1.549 billion and $ 1.622 billion, respectively.

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

As of December 31, 2022 and 2021, approximately 41 % of our loan portfolio was secured by properties located in Pennsylvania.

We do not believe we have significant concentrations of credit risk to any one group of borrowers given our underwriting and collateral requirements.

Loans receivable as of December 31, 2022 and 2021 include $ 3.333 billion and $ 3.277 billion, respectively, of adjustable rate loans and $ 7.511 billion and $ 6.739 billion, respectively, of fixed rate loans.

The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the year ended December 31, 2023 (in thousands):

Balance as of December 31, 2023 Current

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

period provision Charge-offs Recoveries ASU 2022-02 Adoption Balance as of December 31, 2022

Allowance for Credit Losses

7 unchanged sentences

Commercial real estate loans 51,267 6,604 ( 2,298 ) 2,029 426 44,506

Commercial real estate loans - owner occupied 4,004 36 — 85 3,883

Commercial real estate loans -

owner occupied 3,775 ( 227 ) ( 68 ) 66 — 4,004

Commercial loans 18,495 548 ( 4,166 ) 1,474 — 20,639

9 unchanged sentences

Commercial real estate loans 6,147 772 — — — 5,375

Commercial real estate loans - owner occupied 287 145 — — 142

Commercial real estate loans -

owner occupied 173 ( 206 ) — — — 379

Commercial loans 10,736 3,655 — — — 7,081

1 unchanged sentence

Total off-balance-sheet exposure $ 17,123 4,210 — — — 12,913

(1) The table above has been revised to reflect the correct ending balance for total off-balance-sheet exposure at December 31, 2022.

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

During the year ended December 31, 2023, we sold $ 8.0 million of loans that were classified as held-for-investment, for a gain of $ 726,000 , which is reported in gain on sale of loans on the Consolidated Statements of Income.

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

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

26 unchanged sentences

Total off-balance-sheet exposure $ 12,913 10,455 — — 2,458

(1) The table above has been revised to reflect the correct ending balance for total off-balance-sheet exposure at December 31, 2022.

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

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

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

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

Balance as of December 31, 2021 Current

period provision Charge-offs Recoveries Initial ACL

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

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

Allowance for Credit Losses

16 unchanged sentences

Home equity loans 39 4 — — 35

Consumer loans — — — — — ( 402 ) 402

Total Personal Banking 41 4 — — 37

5 unchanged sentences

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

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

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

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at December 31, 2023 (in thousands):

1 unchanged sentence

credit losses Nonaccrual

loans (1) Loans 90 days past due and accruing TDRs Allowance

TDRs Additional

classified as

loans Loans 90 days past due and accruing

Personal Banking:

10 unchanged sentences

Total $ 11,414,809 125,243 94,384 2,698

(1) Includes $ 29.2 million of nonaccrual TDRs.

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at December 31, 2021 (in thousands):

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at December 31, 2022, prior to the adoption of ASU 2022-02 (in thousands):

receivable Allowance for

20 unchanged sentences

December 31, 2023, 2022 and 2021

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

We present the amortized cost of our loans on nonaccrual status including such loans with no allowance.

The following table presents the amortized cost of our loans on nonaccrual status as of the beginning and end of the year ended December 31, 2023 (in thousands):

15 unchanged sentences

Total $ 81,236 68,835 25,549 94,384 2,698

During the year ended December 31, 2022, we recognized $ 678,000 of interest income on nonaccrual and troubled debt restructuring loans.

During the year ended December 31, 2023, we did not recognize any interest income on nonaccrual loans.

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

19 unchanged sentences

December 31, 2023, 2022 and 2021

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

A loan is considered to be collateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral.

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2023 (in thousands):

Real estate Equipment Total

Personal Banking:

Residential mortgage loans $ 569 — 569

Home equity loans 100 — 100

Total Personal Banking 669 — 669

Real estate Total

Commercial Banking:

14 unchanged sentences

Total $ 57,900 210 58,110

Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extensions, an other-than-insignificant payment delay, or interest rate reduction.

When principal forgiveness is provided, the amount of forgiveness is charged off against the allowance for credit losses.

In some cases, the Company provides multiple types of concessions to one loan.

Typically, one type of concession, such as a term extension, is granted initially.

If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

For loans included in the “combination” columns below, multiple types of modifications have been made on the same loan within the current reporting period.

The combination is at least two of the following:

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 December 31, 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 (dollars in thousands).

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

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

These concessions typically result from our loss mitigation activities and could include:

extending the note’s maturity date, permitting interest only payments, reducing the interest rate to a rate lower than current market rates for new debt with similar risk, reducing the principal payment, principal forbearance or other actions.

These concessions are applicable to all loan segments and classes.

Certain TDRs are classified as nonperforming at the time of restructuring and may be returned to performing status after considering the borrower’s sustained repayment performance for a period of at least six months.

When we modify loans in a TDR, we evaluate any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, the loan’s observable market price or the current fair value of the collateral, less selling costs, for collateral dependent loans.

If we determine that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premiums or discounts), impairment is recognized through an allowance estimate or a charge-off to the allowance.

In periods subsequent to modification, we evaluate all TDRs, including those that have payment defaults, for possible impairment in accordance with ASC 310-10.

As a result, loans modified in a TDR may have the financial effect of increasing the specific allowance associated with the loan.

Loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default.

If loans modified in a TDR subsequently default, we evaluate the loan for possible further impairment.

The allowance may be increased, adjustments may be made in the allocation of the allowance, partial charge-offs may be taken to further write-down the carrying value of the loan, or the loan may be charged-off completely.

In March 2020 and August 2020, joint statements were issued by federal and state regulatory agencies, after consultation with the FASB, to clarify that short-term loan modifications are not TDRs if made on a good-faith basis in response to COVID-19 to borrowers who were current prior to any relief.

Under this guidance, six months is provided as an example of short-term, and current is defined as less than 30 days past due at the time the modification program is implemented.

The guidance also provides that these modified loans generally will not be classified as nonaccrual during the term of the modification.

For borrowers who are 30 days or more past due when enrolling in a loan modification program related to the COVID-19 pandemic , we evaluate the loan modifications under our existing TDR framework, and where such a loan modification would result in a concession to a borrower experiencing financial difficulty, the loan will be accounted for as a TDR and will generally not accrue interest.

This TDR relief under the CARES Act was extended by the Consolidated Appropriations Act, 2021 (“CAA”), signed into law on December 27, 2020.

Under the CAA, such relief came to an end on January 1, 2022.

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

Accordingly, these loans were not categorized as TDRs.

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

Personal Banking:

Residential mortgage loans

$ 363 499 — 0.03 %

Home equity loans — 403 84 0.04 %

Consumer loans

Total Personal Banking 363 902 87 0.02 %

Commercial Banking:

Commercial real estate loans — 71 — — %

Commercial loans — 11 — — %

Total Commercial Banking — 82 — — %

Total $ 363 984 87 0.01 %

The Company has committed to lend additional amounts totaling $ 31,000 to the borrowers included in the previous table.

The following table presents the effect of the loan modifications presented above to borrowers experiencing financial difficulty for the year ended December 31, 2023:

Weighted-average interest rate reduction Weighted-average term extension in months Payment deferral (Years)

Personal Banking:

Residential mortgage loans — 142 0.50

Home equity loans 5 % 92 —

Consumer loans 12 % 356 —

Total Personal Banking 17 % 118 0.50

Commercial Banking:

Commercial real estate loans — 57 —

Commercial loans — 23 —

Total Commercial Banking — 52 —

Total loans 17 % 113 0.50

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 (in thousands):

Current 30-59 days

delinquent 60-89 days

delinquent 90 days or

Personal Banking:

Residential mortgage loans $ 148 342 8 363

Home equity loans 465 23 — —

Consumer loans 3 — — —

Total Personal Banking 616 365 8 363

Commercial Banking:

Commercial real estate loans 71 — — —

Commercial loans 11 — — —

Total Commercial Banking 82 — — —

Total loans $ 698 365 8 363

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

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

For the years ended December 31,

contracts Amount Number of

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) :

Payment delay

Personal Banking:

Residential mortgage loans $ 363

Total Personal Banking 363

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.

Subsequent performance of the loans will be measured by delinquency status and will be captured through our ACL models or our qualitative factor assessment, as deemed appropriate.

If we no longer believe the loan demonstrates similar risks to their respective portfolio segment an individual assessment will be performed.

Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off.

Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

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

For the year ended December 31, 2022

contracts Amount

Beginning TDR balance:

134 $ 30,288 170 $ 32,135

New TDRs 14 30,894

2 unchanged sentences

Residential mortgage loans 2 ( 63 )

Home equity loans — — 1 ( 29 )

Commercial real estate loans 1 ( 150 )

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

Commercial loans 1 ( 130 )

6 unchanged sentences

Ending TDR balance:

123 $ 40,681 134 $ 30,288

Accruing TDRs $ 11,442

Nonaccrual TDRs 29,239

The following tables provide 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 year ended December 31, 2022

contracts Recorded

at the time of

modification Current

investment Current

Personal Banking:

Residential mortgage loans 4 $ 530 522 37

Home equity loans 6 183 171 42

Total Personal Banking 10 713 693 79

Commercial Banking:

Commercial real estate loans 9 34,716 20,954 66

Commercial loans 6 3,856 263 20

Total Commercial Banking 15 38,572 21,217 86

Total 25 $ 39,285 21,910 165

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

The following tables provide 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 (dollars in thousands):

For the year ended December 31, 2022

23 unchanged sentences

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

Commercial real estate loans - owner occupied 1 58 48 8

Commercial loans 6 4,147 3,903 451

1 unchanged sentence

Total 18 $ 16,433 14,623 1,953

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

Type of modification

13 unchanged sentences

December 31, 2023, 2022 and 2021

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

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

Type of modification

Number of contracts Rate Payment Maturity date Other Total

Personal Banking:

Residential mortgage loans

1 $ 114 — — — 114

Home equity loans

3 — 30 4 — 34

Total Personal Banking 4 114 30 4 — 148

Commercial Banking:

Commercial real estate loans

8 2,077 — 8,424 71 10,572

Commercial loans

6 171 — 3,732 — 3,903

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

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

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

Type of modification

9 unchanged sentences

8 2,077 — 8,424 71 10,572

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

Commercial loans

2 unchanged sentences

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

The following table provides information related to re-modified trouble debt restructurings by portfolio segment and class of financing receivable for modifications during the year ended December 31, 2022 (in thousands):

Type of re-modification

2 unchanged sentences

Residential mortgage loans

1 $ — 129 129

Home equity loans

5 unchanged sentences

Total 11 $ 53 535 588

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022, 2021 and 2020

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

Type of re-modification

10 unchanged sentences

Total 9 $ 2,191 5,108 71 7,370

Type of re-modification

re-modified TDRs Maturity date Other Total

Commercial Banking:

Commercial real estate loans

3 6,652 — 6,652

Commercial real estate loans - owner occupied 1 48 — 48

Commercial loans

Total Commercial Banking 5 6,700 80 6,780

Total 5 6,700 80 6,780

No TDRs modified within the previous twelve months of December 31, 2022 or December 31, 2020 subsequently defaulted.

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

of December 31, 2021 that subsequently defaulted:

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023, 2022 and 2021

No TDRs modified within the previous twelve months of December 31, 2022 subsequently defaulted.

The following table provides information related to troubled debt restructurings modified within the previous twelve months of December 31, 2021 that subsequently defaulted (prior to the adoption of ASU 2022-02):

contracts Recorded

6 unchanged sentences

Total 1 $ 4,167 3,823 —

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022, 2021 and 2020

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

The following table provides information related to the amortized cost basis of loan payment delinquencies at December 31, 2023 (in thousands):

46 unchanged sentences

December 31, 2023, 2022 and 2021

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

Credit Quality Indicators:

30 unchanged sentences

December 31, 2023, 2022 and 2021

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

Based on the most recent analysis performed, the amortized cost basis by risk category of loans by class of loans by origination year is as follows as of December 31, 2022 (in thousands):

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 December 31, 2023 (in thousands):

2023 2022 2021 2020 2019 Prior Revolving loans Revolving loans converted to term loans Total loans

4 unchanged sentences

Total residential mortgage loans 186,081 666,960 792,488 507,320 244,989 1,030,347 — — 3,428,185

Residential mortgage current period charge-offs — ( 9 ) ( 5 ) ( 130 ) ( 23 ) ( 1,023 ) — — ( 1,189 )

Home equity loans

2 unchanged sentences

Total home equity loans 71,497 100,875 106,097 146,318 94,179 198,992 465,315 44,585 1,227,858

Home equity current period charge-offs — ( 53 ) ( 46 ) — ( 48 ) ( 352 ) ( 144 ) ( 209 ) ( 852 )

Vehicle loans

2 unchanged sentences

Total vehicle loans 665,522 683,693 399,262 133,074 68,409 58,641 — — 2,008,601

Vehicle current period charge-offs ( 678 ) ( 1,844 ) ( 1,967 ) ( 475 ) ( 652 ) ( 853 ) — — ( 6,468 )

Consumer loans

2 unchanged sentences

Total consumer loans 24,332 11,625 5,571 2,078 1,361 6,649 64,940 870 117,426

Consumer loan current period charge-offs ( 3,412 ) ( 511 ) ( 390 ) ( 157 ) ( 177 ) ( 980 ) ( 317 ) ( 38 ) ( 5,983 )

Total Personal Banking 947,432 1,463,153 1,303,418 788,790 408,938 1,294,629 530,255 45,455 6,782,070

5 unchanged sentences

Total commercial real estate loans 228,074 496,247 358,594 356,152 269,479 866,626 28,373 24,912 2,628,457

Commercial real estate loans - owner occupied

Commercial real estate current period

charge-offs ( 14 ) — ( 492 ) — ( 51 ) ( 1,741 ) — — ( 2,298 )

Commercial real estate loans -

owner occupied

Pass 24,725 51,986 47,655 15,984 28,614 140,175 2,378 2,390 313,907

1 unchanged sentence

Substandard — — 118 1,666 4,646 4,641 — 678 11,749

Total commercial real estate loans - owner occupied 63,031 51,673 18,007 54,685 48,307 133,634 2,862 3,328 375,527

Total commercial real estate loans -

owner occupied 25,946 52,106 48,991 17,650 47,646 147,768 2,378 3,068 345,553

Commercial real estate - owner occupied current period charge-offs — — — — — ( 68 ) — — ( 68 )

Commercial loans

3 unchanged sentences

Total commercial loans 483,113 437,064 74,393 27,523 36,691 55,483 538,353 6,109 1,658,729

Commercial loans current period

charge-offs ( 35 ) ( 2,072 ) ( 517 ) ( 430 ) ( 205 ) ( 845 ) ( 60 ) ( 2 ) ( 4,166 )

Total Business Banking 737,133 985,417 481,978 401,325 353,816 1,069,877 569,104 34,089 4,632,739

5 unchanged sentences

December 31, 2023, 2022 and 2021

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

The following table summarizes amortized cost basis loan balances by year of origination, class of loans, and risk category as of December 31, 2022 (in thousands):

41 unchanged sentences

December 31, 2023, 2022 and 2021

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

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

22 unchanged sentences

As of December 31, 2023, the maximum potential amount of future payments we could be required to make under these standby letters of credit is $ 46.9 million, of which $ 29.7 million is fully collateralized.

A liability (which represents deferred income) of $ 792,000 and $ 500,000 has been recognized for the obligations as of December 31, 2022 and 2021, respectively, and there are no recourse provisions that would enable us to recover any amounts from third parties.

In addition, we maintain a $ 5.0 million credit limit with a correspondent bank for private label credit card facilities for certain existing commercial clients of the Bank, of which $ 777,000 of the credit limit was allocated to credit cards that have been issued.

A liability (which represents deferred income) of $ 1.1 million and $ 792,000 has been recognized for the obligations as of December 31, 2023 and 2022, respectively, and there are no recourse provisions that would enable us to recover any amounts from third parties.

In addition, we maintain a $ 10.0 million credit limit with a correspondent bank for private label credit card facilities for certain existing commercial clients of the Bank, of which $ 6.9 million of the credit limit was allocated to credit cards that have been issued.

These issued credit cards had an outstanding balance of $ 632,000 at December 31, 2023.

16 unchanged sentences

December 31, 2023, 2022 and 2021

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

The following table shows changes in MSRs as of and for the years ended December 31, 2023 and 2022:

8 unchanged sentences

Additions 788 ( 1 ) 787

MSR sale ( 5,930 ) — ( 5,930 )

Amortization ( 1,551 ) — ( 1,551 )

29 unchanged sentences

Our investment in the capital stock of the FHLB of Pittsburgh at December 31, 2023 and December 31, 2022 was $ 27.0 million and $ 37.0 million, respectively.

In addition, our investment of capital stock of the FHLB of Indianapolis at December 31, 2022 was $ 3.1 million and $ 3.8 million at December 31, 2021.

We received dividends on capital stock during the years ended December 31, 2022 and 2021 of $ 730,000 and $ 407,000 , respectively.

In addition, our investment of capital stock of the FHLB of Indianapolis at December 31, 2023 and December 31, 2022 was $ 3.1 million.

We received dividends on capital stock during the years ended December 31, 2023 and 2022 of $ 2.9 million and $ 730,000 , respectively.

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

3 unchanged sentences

December 31, 2023, 2022 and 2021

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

(8) Premises and Equipment

15 unchanged sentences

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

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

accumulated amortization ( 12,775 ) ( 12,747 )

9 unchanged sentences

For the year ending December 31, 2027 305

The following table provides information for the changes in the carrying amount of goodwill:

Balance at December 31, 2022 $ 380,997

Balance at December 31, 2023 $ 380,997

We performed our annual goodwill impairment test as of June 30, 2023 2022, and 2021 in accordance with ASC 350, Intangibles - Goodwill and Other, and concluded that goodwill was not impaired.

As of December 31, 2023, 2022 and 2021, there were no events or changes in circumstances that would cause us to update that year ’ s goodwill impairment test and we concluded there was no impairment of goodwill as of such dates.

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

The following table provides information for the changes in the carrying amount of goodwill:

Balance at December 31, 2020 $ 382,279

Purchase accounting adjustment 77

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

Balance at December 31, 2021 380,997

Balance at December 31, 2022 $ 380,997

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

As of December 31, 2022, 2021 and 2020, 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.

(10) Deposits

Deposit balances at December 31, 2023 and 2022 are shown in the table below:

5 unchanged sentences

Total deposits $ 11,979,902 11,464,548

(1) Includes $ 483.9 million and $ 0 of brokered deposits at December 31, 2023 and 2022.

The aggregate amount of time deposits with a minimum denomination of $100,000 at December 31, 2023 and 2022 was $ 950.3 million and $ 355.0 million, respectively.

17 unchanged sentences

Total interest expense on deposits $ 105,343 14,120 19,122

(1) Includes $ 7.8 million, $ 0 , and $ 0 of interest expense on brokered deposits at December 31, 2023, 2022, and 2021.

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

(11) Borrowed Funds

8 unchanged sentences

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

At December 31, 2023, the carrying value of these loans was $ 6.022 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 December 31, 2022 and December 31, 2021, the balance of the revolving line of credit was $ 51.3 million and $ 0 , respectively.

At December 31, 2023 and December 31, 2022, the balance of the revolving line of credit was $ 163.5 million and $ 51.3 million, respectively.

At December 31, 2023 and December 31, 2022, collateralized borrowings due within one year were $ 35.5 million and $ 105.8 million, respectively.

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

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

The average amount of collateralized borrowings outstanding in the years ended December 31, 2022 and 2021 was $ 115.4 million and $ 132.1 million, respectively.

The maximum amount of collateralized borrowings outstanding during the years ended December 31, 2022 and 2021 was $ 135.7 million and $ 139.6 million, respectively.

At December 31, 2022 and December 31, 2021, collateral received was $ 24.1 million and $ 0 , respectively.

At December 31, 2023, the carrying value of the cash and securities used as collateral was $ 92.0 million.

At December 31, 2023 and December 31, 2022, collateral received was $ 24.9 million and $ 24.1 million, respectively.

This represents collateral posted to us from our derivative counterparties.

At December 31, 2022 and December 31, 2021, term notes payable to the FHLB of Pittsburgh due within one year were $ 500.0 million and $ 0 , respectively.

This total is made up of five advances:

$ 100.0 million at 4.54 % maturing January 6, 2023;

$ 100.0 million at 4.53 % maturing January 13, 2023;

At December 31, 2023 and December 31, 2022, term notes payable to the FHLB of Pittsburgh due within one year were $ 175.0 million and $ 500.0 million, respectively.

The December 31, 2023 total is made up of seven advances:

$ 25.0 million at 5.76 % maturing January 26, 2024;

$ 25.0 million at 5.77 % maturing January 31, 2024;

and $ 100.0 million at 4.58 % maturing January 27, 2023.

$ 25.0 million at 5.73 % maturing February 9, 2024;

$ 25.0 million at 5.68 % maturing February 13, 2024;

$ 25.0 million at 5.70 % maturing February 12, 2024;

$ 25.0 million at 5.67 % maturing February 20, 2024 and $ 25.0 million at 5.67 % maturing February 29, 2024.

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

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

During the year-ended December 31, 2022 the Company repurchased $ 10.2 million of subordinated notes leaving $ 114.8 million of subordinated notes outstanding.

During the year-ended December 31, 2022 the Company repurchased $ 10.2 million of subordinated notes leaving $ 114.8 million of subordinated notes outstanding as of December 31, 2023.

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

At December 31, 2023 and December 31, 2022, subordinated debentures, net of issuance costs, were $ 114.2 million and $ 113.8 million, respectively.

For the years ended December 31, 2023, December 31, 2022, and December 31, 2021 total interest expense paid on the subordinate notes was $ 4.9 million, $ 5.1 million, and $ 5.3 million, respectively.

(b) Trust Preferred Securities

6 unchanged sentences

December 31, 2023, 2022 and 2021

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

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

5 unchanged sentences

securities December 31,

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

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 7,999 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 2,796 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 3,788 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 3,778 3,674

7 unchanged sentences

Our obligation constitutes a full, irrevocable, and unconditional guarantee on a subordinated basis of the obligations of the trust under the preferred securities.

For the years ended December 31, 2023, December 31, 2022, and December 31, 2021, total interest expense paid on the trust preferred securities was $ 9.4 million, $ 4.7 million, and $ 2.5 million respectively.

The Trusts must redeem the preferred securities when the debentures are paid at maturity or upon an earlier redemption of the debentures to the extent the debentures are redeemed.

5 unchanged sentences

• the preferred securities do not qualify as Tier I capital.

We may, at any time, dissolve any of the Trusts and distribute the debentures to the trust security holders, subject to receipt of any required regulatory approval(s).

We may, at any time, dissolve any of the Trusts and distribute the debentures to the trust security holders, subject to receipt of any required regulatory approvals.

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

(12) Income Taxes

5 unchanged sentences

Shareholders’ equity for pension adjustment 3,354 6,980 9,659

Shareholders’ equity for swap fair value adjustment ( 110 ) — —

Unallocated income tax $ 46,794 1,685 46,035

27 unchanged sentences

December 31, 2023, 2022 and 2021

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

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2023 and 2022 are presented below:

20 unchanged sentences

Right of use asset 13,917 12,463

Pension and post-retirement benefits 587 —

Interest rate derivatives 134 123

6 unchanged sentences

The carryovers begin to expire in 2025.

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

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

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

10 unchanged sentences

December 31, 2023, 2022 and 2021

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

The following table presents changes in unrecognized tax benefits at December 31, 2023, 2022 and 2021:

11 unchanged sentences

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

We are under audit by the state of New York for tax years 2016 through 2018.

We do not expect any material adjustments from this audit.

No findings have been issued at this time.

(13) Shareholders’ Equity

15 unchanged sentences

December 31, 2023, 2022 and 2021

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

The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2023, 2022 and 2021.

21 unchanged sentences

Employees that are hired, rehired, acquired, or transfer to an eligible job classification on or after August 1, 2020 are not eligible to participate in the Pension Plan.

Total expense for all retirement plans, including defined benefit pension plans, was approximately $ 4.5 million, $ 10.1 million and $ 8.2 million, for the years ended December 31, 2022, 2021 and 2020, respectively.

Total expense for the defined contribution retirement savings plan was $ 4.4 million, $ 3.6 million, and $ 4.6 million for the years ended December 31, 2023, 2022 and 2021, and net periodic pension expense for the defined benefit pension plan was a benefit of $ 1.1 million for the year ended December 31, 2023 and a total cost of $ 893,000 and $ 5.5 million for the years ended 2022 and 2021, respectively.

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

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

10 unchanged sentences

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

Net (gain)/loss ( 28,222 ) ( 36,552 ) 11,521

Net gain ( 14,066 ) ( 28,222 ) ( 36,552 )

Amortization of prior service cost 2,254 2,257 2,322

1 unchanged sentence

Total recognized in net periodic pension cost and other comprehensive income $ ( 12,950 ) ( 25,072 ) ( 28,745 )

The estimated net gain and prior service credit for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic cost ending December 31, 2023 is $ 1.6 million and $ 1.5 million, respectively.

The following table sets forth information for the defined benefit pension plans’ funded status at December 31, 2023 and 2022:

23 unchanged sentences

December 31, 2023, 2022 and 2021

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

The following table sets forth the assumptions used to determine benefit obligations at the end of each period:

34 unchanged sentences

December 31, 2023, 2022 and 2021

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

All of the assets held by the defined benefit pension plan are measured and recorded at estimated fair value on our balance sheet on a recurring basis as Level 1 assets, as defined by the fair value hierarchy defined in Note 16.

23 unchanged sentences

2023 2022 2021

Net loss/(gain) $ 183 ( 66 ) ( 51 )

Net (gain)/loss $ ( 35 ) 183 ( 66 )

Total recognized in other comprehensive income $ ( 35 ) 183 ( 66 )

Total recognized in net periodic benefit cost and other comprehensive loss $ 229 ( 10 ) ( 7 )

Total recognized in net periodic benefit cost and other comprehensive income $ 74 229 ( 10 )

The estimated net loss for the post-retirement healthcare benefit plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the year ending December 31, 2024 is $ 38,000 .

3 unchanged sentences

December 31, 2023, 2022 and 2021

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

The following table sets forth the funded status of the post-retirement healthcare benefit plan at December 31, 2023 and 2022:

2 unchanged sentences

Interest cost 71 40

Actuarial loss/(gain) 189 ( 53 )

Actuarial loss 3 189

Benefits paid ( 209 ) ( 268 )

19 unchanged sentences

From this plan, we awarded employees 293,755 common shares and outside directors 27,000 common shares with a grant date fair value of $ 13.68 per share (total market value of $ 4.4 million at issuance) on May 25, 2021.

We also awarded employees 293,755 common shares and outside directors 27,000 common shares with a grant date fair value of $ 13.68 per share (total market value of $ 4.4 million at issuance) on May 25, 2021.

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

During 2022, we awarded discretionary grants of 12,521 common shares with a weighted average grant date fair value of $ 13.98 .

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

These shares vest over a five or seven years period, depending on the date of grant, with the first vesting occurring on the date of grant.

Total common shares forfeited from the 2018 plan were 265,176 , of which 40,362 shares were forfeited during the year ended December 31, 2023.

1 unchanged sentence

At December 31, 2023, there was compensation expense of $ 2.1 million to be recognized for unvested restricted common shares, with an expense recognition period remaining of three years .

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022, 2021 and 2020

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

On May 18, 2022, shareholders approved the Northwest Bancshares, Inc.

2022 Equity Incentive Plan with 3,500,000 shares authorized for award.

From this plan, we awarded employees 150,027 restricted stock units (“RSUs”) with a weighted average discounted grant date fair value of $ 11.00 (total market value of $ 1.7 million at issuance) on May 18, 2022.

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 (total market value of $ 517,000 at issuance), which fully vest one-year from the grant date, on May 18, 2022.

We also awarded employees 150,027 performance share units (“PSUs”) with a discounted grant date fair value of $ 10.26 (total market value of $ 1.5 million at issuance) on May 18, 2022.

From this plan we can awarded employees or directors restricted stock units (“RSUs”).

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

We also award restricted stock awards (“RSAs”) which fully vest one-year from the grant date.

We also award performance share units (“PSUs”).

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.

Also during 2022, we awarded RSU discretionary grants of 13,115 shares with a weighted average discounted grant date fair value of $ 12.69 .

Total shares forfeited from the 2022 plan were 26,282 as of December 31, 2022.

At December 31, 2022, there was compensation expense of $ 1.2 million to be recognized recognized for awarded but unvested RSUs and $ 1.0 million to be recognized for awarded but unvested PSUs, with an expense recognition period remaining of 2.5 years.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023, 2022 and 2021

During the years ended December 31, 2022 and 2023, we granted the following awards (amounts in this table are not in thousands) :

Year-ended Grant date Award to Shares Grant type Weighted average grant date fair value Total

market value Vesting period

December 31, 2022

5/18/2022 Employees 150,027 RSU $ 11.00 $ 1.7 million 3 years

5/18/2022 Employees 150,027 PSU 10.26 $ 1.5 million 3 years

5/18/2022 Directors 41,206 RSA 12.55 $ 517,000 1 year

Various Employees 13,115 RSU 12.69 $ 166,000 3 years

December 31, 2023

3/15/2023 Employees 176,623 RSU 11.28 $ 2.0 million 3 years

3/15/2023 Employees 176,623 PSU 10.54 $ 1.9 million 3 years

3/15/2023 Directors 33,048 RSA 12.80 $ 423,000 1 year

3/27/2023 Employees 80,980 RSU 11.20 $ 907,000 2 years

Various Employees 128148 RSU 10.30 $ 1.3 million 3 years

Total shares forfeited from the 2022 plan were 71,073 of which 44,791 shares were forfeited during the year ended December 31, 2023.

At December 31, 2023, there was compensation expense of $ 4.0 million to be recognized for awarded but unvested RSUs and $ 1.8 million to be recognized for awarded but unvested PSUs, with an expense recognition period remaining of 2.5 years.

At December 31, 2023, there was compensation expense of $ 88,000 to be recognized for awarded but unvested RSAs, with an expense recognition period remaining of one year .

3 unchanged sentences

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

There were no stock options granted during the year-ended December 31, 2022.

There were no stock options granted during the years-ended December 31, 2022 and December 31, 2023.

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

13 unchanged sentences

(1) Weighted average fair value of options at grant date:

N/A, $ 0.64 and $ 0.13 , respectively.

(2) The total intrinsic value of options exercised was $ 839,000 , $ 2.3 million and $ 444,000 , respectively.

N/A, N/A and $ 0.64 , respectively.

(2) The total intrinsic value of options exercised was $ 115,000 , $ 839,000 and $ 2.3 million, respectively.

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

The aggregate intrinsic value of all options expected to vest and fully vested options at December 31, 2023 is ($ 748,000 ) and ($ 5.3 ) million, respectively.

The following table summarizes the number of options outstanding, number of options exercisable, and weighted average remaining life of all option grants as of December 31, 2023 (amounts in this table are not in thousands):

Exercise price

Options outstanding:

4 unchanged sentences

Weighted average remaining term - vested (years) 6.5 1.5 0.5 7.5

Exercise price

Total average

Options outstanding:

20 unchanged sentences

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

• Quotes and other information from brokers or other external sources where the inputs are not deemed observable.

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

• Quotes and other information from brokers or other external sources where the inputs are not deemed observable.

We are responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value.

1 unchanged sentence

We also corroborate the reasonableness of external inputs in the valuation process.

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

financial instruments:

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, residential mortgage loans held-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.

23 unchanged sentences

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

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

The valuation adjustment for the portfolio consists of the present value of the difference of these two cash flows, discounted at the assumed market rate of the corresponding maturity.

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

locally for deposits of similar remaining maturities.

The valuation adjustment for the portfolio consists of the present value of the difference of these two cash flows, discounted at the assumed market rate of the corresponding maturity.

Borrowed Funds

9 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.

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.

Cash Flow Hedges, 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 SOFR discount curve, the basis for the underlying interest rate.

To price interest rate swaps, cash flows are first projected for each payment date using the fixed rate for the fixed side of the swap and the forward rates for the floating side of the swap.

These swap cash flows are then discounted to time zero using LIBOR zero-coupon interest rates.

These swap cash flows are then discounted to time zero using SOFR zero-coupon interest rates.

The sum of the present value of both legs is the fair market value of the interest rate swap.

15 unchanged sentences

December 31, 2023, 2022 and 2021

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

The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the Consolidated Statement of Financial Condition at December 31, 2023 and 2022:

10 unchanged sentences

Forward commitments 12 12 — 12 —

Interest rate swaps designated as hedging instruments 713 713 — 713 —

Interest rate swaps not designated as hedging instruments 41,406 41,406 — 41,406 —

8 unchanged sentences

Foreign exchange swaps 291 291 — 291 —

Interest rate swaps designated as hedging instruments 1,198 1,198 — 1,198 —

Interest rate swaps not designated as hedging instruments 41,437 41,437 — 41,437 —

6 unchanged sentences

December 31, 2023, 2022 and 2021

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

December 31, 2022

29 unchanged sentences

December 31, 2023, 2022 and 2021

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

The following table represents assets and liabilities measured at fair value on a recurring basis as of December 31, 2023:

18 unchanged sentences

Forward commitments — 12 — 12

Interest rate swaps designated as hedging instruments — 713 — 713

Interest rate swaps not designated as hedging instruments — 41,406 — 41,406

1 unchanged sentence

Foreign exchange swaps $ — 291 — 291

Interest rate swaps designated as hedging instruments — 1,198 — 1,198

Interest rate swaps not designated as hedging instruments — 41,437 — 41,437

5 unchanged sentences

December 31, 2023, 2022 and 2021

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

The following table represents assets and liabilities measured at fair value on a recurring basis as of December 31, 2022:

4 unchanged sentences

States and political subdivisions — 111,766 — 111,766

Corporate — 12,978 — 12,978

Total debt securities — 224,537 — 224,537

34 unchanged sentences

December 31, 2023, 2022 and 2021

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

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 December 31, 2022:

23 unchanged sentences

Loans individually assessed 36,747 Appraisal value (1) Estimated cost to sell 10 %

Discounted cash flow Discount rate 6.48 % ( 6.48 %)

Mortgage servicing rights 133 Discounted cash flow Annual service cost $ 91

15 unchanged sentences

December 31, 2023, 2022 and 2021

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

Applicable regulations limit an organization’s capital distributions and certain discretionary bonus payments if the organization does not hold a “capital conservation buffer” consisting of 2.5 % of Total Tier 1 and Common Equity Tier 1 (“CET1”) capital to risk-weighted assets in addition to the amount necessary to meet its minimum risk-based capital requirements.

37 unchanged sentences

December 31, 2023, 2022 and 2021

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

At December 31, 2022

32 unchanged sentences

The following table sets forth the components of accumulated other comprehensive loss as of December 31, 2023 and 2022:

Unrealized gain/(loss) on marketable securities available-for-sale $ ( 164,206 ) ( 12,317 )

Unrealized loss on marketable securities available-for-sale $ ( 150,659 ) ( 164,206 )

Fair value of interest rate swaps ( 374 ) —

Defined benefit pension plans 1,541 ( 6,952 )

4 unchanged sentences

December 31, 2023, 2022 and 2021

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

The following table shows the changes in accumulated other comprehensive loss by component for the year ended December 31, 2023:

Unrealized gains and losses on securities

available-for-sale Change in defined

available-for-sale Change in

fair value of

interest rate

swaps Change in defined

benefit pension plans Total

Balance as of January 1, $ ( 164,206 ) — ( 6,952 ) ( 171,158 )

Other comprehensive (loss)/income before reclassification adjustments (1) (2) ( 151,888 ) 18,884 ( 133,004 )

Other comprehensive income/(loss) before reclassification adjustments (1) (2) (3) 7,875 ( 374 ) 10,019 17,520

Amounts reclassified from accumulated other comprehensive income (4) (5) 5,672 — ( 1,526 ) 4,146

1 unchanged sentence

Balance as of December 31, $ ( 150,659 ) ( 374 ) 1,541 ( 149,492 )

(1) Consists of unrealized holding losses, net of tax of $ 45,321 .

(1) Consists of unrealized holding gains, net of tax of $( 3,429 ).

(2) Change in fair value of interest rate swaps, net of tax of $ 110 .

(3) Consists of unrealized gains, net of tax of $( 3,961 ).

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

(4) Consists of realized losses, net of tax of $( 1,700 ).

(5) Consists of realized gains, net of tax of $ 607 .

3 unchanged sentences

Balance as of January 1, $ ( 12,317 ) ( 25,312 ) ( 37,629 )

Other comprehensive income/(loss) before reclassification adjustments (1) (2) ( 28,873 ) 23,748 ( 5,125 )

Other comprehensive (loss)/income before reclassification adjustments (1) (2) ( 151,888 ) 18,884 ( 133,004 )

Amounts reclassified from accumulated other comprehensive income (3) (4) ( 1 ) ( 524 ) ( 525 )

Net other comprehensive income/(loss) ( 29,160 ) 25,080 ( 4,080 )

Net other comprehensive (loss)/income ( 151,889 ) 18,360 ( 133,529 )

Balance as of December 31, $ ( 164,206 ) ( 6,952 ) ( 171,158 )

2 unchanged sentences

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

(4) Consists of realized losses, net of tax of $( 515 ).

(4) Consists of realized gains, net of tax of $ 202 .

The following table shows the changes in accumulated other comprehensive loss by component for the year ended December 31, 2021:

Unrealized gains and losses on securities

available-for-sale Change in fair value of

interest rate

swaps Change in defined benefit pension plans Total

available-for-sale Change in defined benefit pension plans Total

Balance as of January 1, $ 16,843 ( 50,392 ) ( 33,549 )

Other comprehensive income/(loss) before reclassification adjustments (1) (2) (3) 13,711 ( 946 ) ( 11,301 ) 1,464

Other comprehensive (loss)/income before reclassification adjustments (1) (2) ( 28,873 ) 23,748 ( 5,125 )

Amounts reclassified from accumulated other comprehensive income (3) (4) ( 287 ) 1,332 1,045

Net other comprehensive income/(loss) 13,696 — ( 10,304 ) 3,392

Net other comprehensive (loss)/income ( 29,160 ) 25,080 ( 4,080 )

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

(1) Consists of unrealized holding gains, net of tax of $( 5,607 ).

(1) Consists of unrealized holding losses, net of tax of $ 10,333 .

(3) Consists of unrealized losses, net of tax of $ 4,169 .

(2) Consists of unrealized gains, net of tax of $( 9,144 ).

(3) Consists of realized gains, net of tax of $ 92 .

(4) Consists of realized losses, net of tax of $( 515 ).

(6) Consists of realized losses, net of tax of $( 395 ).

NORTHWEST BANCSHARES, INC.

2 unchanged sentences

December 31, 2023, 2022 and 2021

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

(21) Parent Company Only Financial Statements - Condensed

29 unchanged sentences

December 31, 2023, 2022 and 2021

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

Statements of Cash Flows

22 unchanged sentences

December 31, 2023, 2022 and 2021

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

(22) Derivative Financial Instruments

3 unchanged sentences

Derivatives Designated as Hedging Instruments

During March 2020, the Company entered into four separate pay-fixed interest rate swaps in order to synthetically convert short-term three month FHLB advances to fixed-rate term funding with an aggregate value of $ 100 million with maturities ranging from three to five years .

Our risk management objective and strategy for these interest rate swaps at such time was to reduce our exposure to variability in interest-related cash outflows attributable to changes in the USD-LIBOR swap rate, the designated benchmark interest rate being hedged.

As of December 31, 2023, the Company had 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 each interest rate swap, we have determined these interest rate swaps qualified for hedge accounting in accordance with ASC 815, Derivatives and Hedging .

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.

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 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 in earnings.

During the quarter of September 30, 2020, the Company discontinued these cash flow hedges and, as a result, reclassified a $ 1.3 million loss into earnings.

As of December 31, 2022, the Company had no cash flow hedges.

Amounts reclassified into earnings are included in interest expense in the Consolidated Statement of Income.

Derivatives Not Designated as Hedging Instruments

14 unchanged sentences

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

The following table presents information regarding our derivative financial instruments for the periods indicated:

These risk participation agreements are recorded within other liabilities on the Consolidated Statement of Financial Condition at their estimated fair value.

Changes to the fair value of the the risk participation agreements are included in other operating income in the Consolidated Statement of Income.

NORTHWEST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023, 2022 and 2021

The following table presents information regarding our derivative financial instruments at the dates indicated:

Asset derivatives Liability derivatives

1 unchanged sentence

At December 31, 2023

Derivatives designated as hedging instruments:

Interest rate swap agreements $ 75,000 713 100,000 1,198

Derivatives not designated as hedging instruments:

20 unchanged sentences

(Decrease)/increase in other income ( 613 ) ( 83 ) 1,033

Increase in mortgage banking income 1,368 5,515 6,867

(Decrease)/increase in mortgage banking income ( 34 ) 1,368 5,515

The following table presents information regarding our derivative financial instruments designated as hedging for the year ended December 31, 2023 (dollars in thousands):

Notional amount Effective rate Estimated decrease to interest expense

twelve months Maturity date Remaining term

Interest rate products:

Issued May 11, 2023 $ 25,000 3.48 % $ ( 556 ) 5/11/2027 40

Issued May 12, 2023 25,000 3.52 % ( 544 ) 5/12/2028 52

Issued May 19, 2023 25,000 3.79 % ( 470 ) 11/19/2027 47

Issued May 31, 2023 25,000 4.01 % ( 415 ) 11/30/2026 35

Issued July 26, 2023 25,000 4.29 % ( 369 ) 7/26/2028 55

Issued July 31, 2023 25,000 4.36 % ( 346 ) 1/31/2028 49

Issued August 9, 2023 25,000 4.33 % ( 350 ) 8/9/2027 43

Total $ 175,000 $ ( 3,050 )

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

1 unchanged sentence

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data