Northwest Bancshares, Inc. 10-Q

nwbi-20240331 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2024 OR ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number 001-34582 NORTHWEST BANCSHARES, INC. (Exact name of registrant as specified in its charter) Maryland 27-0950358 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 3 Easton Oval Suite 500 Columbus Ohio 43219 (Address of Principal Executive Offices) (Zip Code) ( 814 ) 726-2140 (Registrant’s telephone number, including area code) Not applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ☐ No ☒ Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading symbol(s) Name of each exchange on which registered Common Stock, $0.01 Par Value NWBI NASDAQ Stock Market, LLC Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ☒ Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: Common Stock ($0.01 par value), 127,264,095 shares outstanding as of April 30, 2024. Table of Contents NORTHWEST BANCSHARES, INC. Table of Contents PART I FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Financial Condition at March 31, 2024 and December 31, 202 3 (Unaudited) 1 Consolidated Statements of Income for the quarter s ended March 31, 2024 and 202 3 (Unaudited) 2 Consolidated Statements of Comprehensive Income/(Loss) for the quarter s ended March 31, 2024 and 202 3 (Unaudited) 3 Consolidated Statements of Changes in Shareholders’ Equity for the quarter s ended March 31, 2024 and 202 3 (Unaudited) 4 Consolidated Statements of Cash Flows for the quarters ended March 3 1, 2024 and 202 3 (Unaudited) 5 Notes to Consolidated Financial Statements (Unaudited) 6 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 36 Item 3. Quantitative and Qualitative Disclosures about Market Risk 48 Item 4. Controls and Procedures 49 PART II OTHER INFORMATION Item 1. Legal Proceedings 49 Item 1A. Risk Factors 49 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 50 Item 3. Defaults Upon Senior Securities 50 Item 4. Mine Safety Disclosures 50 Item 5. Other Information 50 Item 6. Exhibits 51 Signature 52 Table of Contents Item 1. FINANCIAL STATEMENTS NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) (in thousands, except share data) March 31, 2024 December 31, 2023 Assets Cash and cash equivalents $ 119,319 122,260 Marketable securities available-for-sale (amortized cost of $ 1,298,108 and $ 1,240,003 , respectively) 1,094,009 1,043,359 Marketable securities held-to-maturity (fair value of $ 680,353 and $ 699,506 , respectively) 801,107 814,839 Total cash and cash equivalents and marketable securities 2,014,435 1,980,458 Loans held-for-sale 8,082 8,768 Loans held for investment 11,493,164 11,406,041 Allowance for credit losses ( 124,897 ) ( 125,243 ) Loans receivable, net 11,376,349 11,289,566 FHLB stock, at cost 30,811 30,146 Accrued interest receivable 50,680 47,353 Real estate owned, net 50 104 Premises and equipment, net 130,565 138,838 Bank-owned life insurance 252,842 251,895 Goodwill 380,997 380,997 Other intangible assets, net 4,589 5,290 Other assets 268,945 294,458 Total assets $ 14,510,263 14,419,105 Liabilities and shareholders’ equity Liabilities: Noninterest-bearing demand deposits $ 2,618,379 2,669,023 Interest-bearing demand deposits 2,557,866 2,634,546 Money market deposit accounts 1,952,537 1,968,218 Savings deposits 2,156,048 2,105,234 Time deposits 2,786,814 2,602,881 Total deposits 12,071,644 11,979,902 Borrowed funds 400,783 398,895 Subordinated debt 114,276 114,189 Junior subordinated debentures 129,639 129,574 Advances by borrowers for taxes and insurance 46,970 45,253 Accrued interest payable 17,395 13,669 Other liabilities 177,107 186,306 Total liabilities 12,957,814 12,867,788 Shareholders’ equity: Preferred stock, $ 0.01 par value: 50,000,000 authorized, no shares issued — — Common stock, $ 0.01 par value: 500,000,000 shares authorized, 127,253,189 and 127,110,453 shares issued and outstanding, respectively 1,273 1,271 Additional paid-in capital 1,026,173 1,024,852 Retained earnings 678,427 674,686 Accumulated other comprehensive loss ( 153,424 ) ( 149,492 ) Total shareholders’ equity 1,552,449 1,551,317 Total liabilities and shareholders’ equity $ 14,510,263 14,419,105 See accompanying notes to unaudited Consolidated Financial Statements. 1 Table of Contents NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands, except share data) Quarter ended March 31, 2024 2023 Interest income: Loans receivable $ 149,571 123,745 Mortgage-backed securities 7,944 8,537 Taxable investment securities 794 845 Tax-free investment securities 491 700 FHLB stock dividends 607 690 Interest-earning deposits 832 423 Total interest income 160,239 134,940 Interest expense: Deposits 47,686 11,238 Borrowed funds 9,315 11,238 Total interest expense 57,001 22,476 Net interest income 103,238 112,464 Provision for credit losses - loans 4,234 4,870 Provision for credit losses - unfunded commitments ( 799 ) 126 Net interest income after provision for credit losses 99,803 107,468 Noninterest income: Gain on sale of SBA loans 873 279 Service charges and fees 15,523 13,189 Trust and other financial services income 7,127 6,449 Gain on real estate owned, net 57 108 Income from bank-owned life insurance 1,502 1,269 Mortgage banking income 452 524 Other operating income 2,429 2,151 Total noninterest income 27,963 23,969 Noninterest expense: Compensation and employee benefits 51,540 46,604 Premises and occupancy costs 7,627 7,471 Office operations 2,767 3,010 Collections expense 336 387 Processing expenses 14,725 14,350 Marketing expenses 2,149 2,892 Federal deposit insurance premiums 3,023 2,223 Professional services 4,065 4,758 Amortization of intangible assets 701 909 Real estate owned expense 66 181 Merger, asset disposition and restructuring expense 955 2,802 Other expenses 2,070 1,863 Total noninterest expense 90,024 87,450 Income before income taxes 37,742 43,987 Federal and state income taxes expense 8,579 10,308 Net income $ 29,163 33,679 Basic earnings per share $ 0.23 0.27 Diluted earnings per share $ 0.23 0.26 See accompanying notes to unaudited Consolidated Financial Statements. 2 Table of Contents NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (Unaudited) (in thousands) Quarter ended March 31, 2024 2023 Net income $ 29,163 33,679 Other comprehensive (loss)/income net of tax: Net unrealized holding (losses)/gains on marketable securities: Unrealized holding (losses)/gains, net of tax of $ 1,758 and ($ 3,308 ), respectively ( 5,698 ) 13,017 Reclassification adjustment for losses/(gains) included in net income, net of tax of $ 0 and $ 0 , respectively — — Net unrealized holding (losses)/gains on marketable securities ( 5,698 ) 13,017 Change in fair value of interest rate swaps, net of tax of ($ 630 ) and $ 0 , respectively 2,154 — Defined benefit plan: Actuarial reclassification adjustments for prior period service costs and actuarial gains included in net income, net of tax of $ 147 and $ 152 , respectively ( 388 ) ( 382 ) Other comprehensive (loss)/income ( 3,932 ) 12,635 Total comprehensive income $ 25,231 46,314 See accompanying notes to unaudited Consolidated Financial Statements. 3 Table of Contents NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) (in thousands, expect share data) Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total shareholders’ equity Common stock Quarter ended March 31, 2024 Shares Amount Beginning balance at December 31, 2023 127,110,453 $ 1,271 1,024,852 674,686 ( 149,492 ) 1,551,317 Comprehensive income: Net income — — — 29,163 — 29,163 Other comprehensive loss, net of tax of $ 1,275 — — — — ( 3,932 ) ( 3,932 ) Total comprehensive income/(loss) — — — 29,163 ( 3,932 ) 25,231 Exercise of stock options 10 — 20 — — 20 Stock-based compensation expense 146,086 2 1,301 — — 1,303 Stock-based compensation forfeited ( 3,360 ) — — — — — Dividends paid ($ 0.20 per share) — — — ( 25,422 ) — ( 25,422 ) Ending balance at March 31, 2024 127,253,189 $ 1,273 1,026,173 678,427 ( 153,424 ) 1,552,449 Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total shareholders’ equity Common stock Quarter ended March 31, 2023 Shares Amount Beginning balance at December 31, 2022 127,028,848 $ 1,270 1,019,647 641,727 ( 171,158 ) 1,491,486 Comprehensive income: Net income — — — 33,679 — 33,679 Other comprehensive income, net of tax of ($ 3,157 ) — — — — 12,635 12,635 Total comprehensive income — — — 33,679 12,635 46,314 Adoption of ASU No. 2022-02 — — — ( 329 ) — ( 329 ) Exercise of stock options 38,218 1 464 — — 465 Stock-based compensation expense 33,048 — 744 — — 744 Stock-based compensation forfeited ( 34,714 ) — — — — — Dividends paid ($ 0.20 per share) — — — ( 25,405 ) — ( 25,405 ) Ending balance at March 31, 2023 127,065,400 $ 1,271 1,020,855 649,672 ( 158,523 ) 1,513,275 See accompanying notes to unaudited Consolidated Financial Statements. 4 Table of Contents NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Quarter ended March 31, 2024 2023 Operating activities: Net income $ 29,163 33,679 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 3,435 4,996 Net (gain)/loss on sale of assets ( 6,023 ) 1,254 Mortgage banking activity ( 794 ) ( 179 ) Gain on sale of SBA loans ( 852 ) — Net depreciation, amortization and accretion 4,646 2,154 Decrease in other assets 33,565 6,958 Decrease in other liabilities ( 2,427 ) ( 24,494 ) Net amortization on marketable securities 625 876 Noncash compensation expense related to stock benefit plans 1,303 744 Noncash write-down of other assets 5,929 37 Origination of loans held-for-sale ( 43,052 ) ( 30,712 ) Proceeds from sale of loans held-for-sale 45,183 34,530 Net cash provided by operating activities 70,701 29,843 Investing activities: Purchase of marketable securities available-for-sale ( 79,052 ) — Proceeds from maturities and principal reductions of marketable securities held-to-maturity 13,553 15,028 Proceeds from maturities and principal reductions of marketable securities available-for-sale 20,501 28,246 Proceeds from bank-owned life insurance — 1,633 Loan originations ( 1,055,402 ) ( 923,686 ) Proceeds from loan maturities and principal reductions 962,835 748,472 Net redemptions of FHLB stock ( 665 ) ( 1,376 ) Proceeds from sale of real estate owned 114 186 (Purchases)/disposals of premises and equipment, net ( 5,471 ) 1,340 Net cash used in investing activities ( 143,587 ) ( 130,157 ) Financing activities: Net increase in deposits 91,742 72,631 Net increase in short-term borrowings 1,888 7,475 Increase in advances by borrowers for taxes and insurance 1,717 2,280 Cash dividends paid on common stock ( 25,422 ) ( 25,405 ) Proceeds from stock options exercised 20 465 Net cash provided by financing activities 69,945 57,446 Net decrease in cash and cash equivalents $ ( 2,941 ) $ ( 42,868 ) Cash and cash equivalents at beginning of period $ 122,260 139,365 Net decrease in cash and cash equivalents ( 2,941 ) ( 42,868 ) Cash and cash equivalents at end of period $ 119,319 96,497 Cash paid during the period for: Interest on deposits and borrowings (including interest credited to deposit accounts of $ 37,257 and $ 10,676 , respectively) $ 53,275 23,471 Income taxes 612 291 Non-cash activities: Loan foreclosures and repossessions $ 1,148 847 See accompanying notes to unaudited Consolidated Financial Statements. 5 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) Basis of Presentation and Informational Disclosures Northwest Bancshares, Inc. (the “Company” or “NWBI”), a Maryland corporation headquartered in Columbus, Ohio, is a bank holding company regulated by the Board of Governors of the Federal Reserve System (“FRB”). The primary activity of the Company is the ownership of all of the issued and outstanding common stock of Northwest Bank, a Pennsylvania-chartered savings bank (“Northwest”). Northwest is regulated by the Federal Deposit Insurance Corporation (“FDIC”) and the Pennsylvania Department of Banking. Northwest operates 142 community-banking offices throughout Pennsylvania, Western New York, Eastern Ohio, and Indiana. The accompanying unaudited Consolidated Financial Statements include the accounts of the Company and its subsidiary, Northwest, and Northwest’s subsidiaries Northwest Capital Group, Inc., Great Northwest Corporation, and Mutual Federal Interest Company, Inc. The unaudited Consolidated Financial Statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information or footnotes required for complete annual financial statements. In the opinion of management, all adjustments necessary for the fair presentation of the Company’s financial position and results of operations have been included. The Consolidated Financial Statements have been prepared using the accounting policies described in the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 updated, as required, for any new pronouncements or changes. Certain items previously reported have been reclassified to conform to the current year’s reporting format. The results of operations for the quarter ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024, or any other period. Recently Adopted Accounting Standards In March 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-02, " Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method ." This ASU allows reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. Entities must make an accounting policy election to apply the proportional amortization method on a tax credit-program-by-tax-credit-program basis. The ASU’s amendments also remove the specialized guidance for low-income-housing tax credit ("LIHTC") investments that are not accounted for using the proportional amortization method and instead require that those LIHTC investments be accounted for using the guidance in other accounting standards. This guidance is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. This ASU is applied on a modified retrospective or retrospective basis with the amendments to remove the specialized guidance for LIHTC also being able to be applied on a prospective basis. This guidance was adopted on January 1, 2024 and did not have a material impact to the Company's financial statements. 6 Table of Contents (2) Marketable Securities The following table shows the portfolio of marketable securities available-for-sale at March 31, 2024 (in thousands): Amortized cost Gross unrealized holding gains Gross unrealized holding losses Fair value Debt issued by the U.S government and agencies: Due after one year through five years $ 20,000 — ( 1,204 ) 18,796 Due after ten years 48,182 — ( 10,260 ) 37,922 Debt issued by government-sponsored enterprises: Due after one year through five years 45,987 — ( 5,819 ) 40,168 Due after five years through ten years 360 — ( 9 ) 351 Municipal securities: Due after one year through five years 4,279 14 ( 426 ) 3,867 Due after five years through ten years 27,921 47 ( 1,886 ) 26,082 Due after ten years 53,464 — ( 9,142 ) 44,322 Corporate debt issues: Due after five years through ten years 8,467 — ( 833 ) 7,634 Residential mortgage-backed securities: Fixed rate pass-through 232,854 93 ( 26,711 ) 206,236 Variable rate pass-through 6,738 12 ( 69 ) 6,681 Fixed rate agency CMOs 776,087 — ( 147,127 ) 628,960 Variable rate agency CMOs 73,769 35 ( 814 ) 72,990 Total residential mortgage-backed securities 1,089,448 140 ( 174,721 ) 914,867 Total marketable securities available-for-sale $ 1,298,108 201 ( 204,300 ) 1,094,009 7 Table of Contents The following table shows the portfolio of marketable securities available-for-sale at December 31, 2023 (in thousands): Amortized cost Gross unrealized holding gains Gross unrealized holding losses Fair value Debt issued by the U.S. government and agencies: Due after one year through five years $ 20,000 — ( 1,135 ) 18,865 Due after ten years 49,383 — ( 9,934 ) 39,449 Debt issued by government-sponsored enterprises: Due after one year through five years 45,986 — ( 5,763 ) 40,223 Due after five years through ten years 386 — ( 12 ) 374 Municipal securities: Due after one year through five years 4,279 22 ( 427 ) 3,874 Due after five years through ten years 20,725 — ( 1,437 ) 19,288 Due after ten years 60,762 125 ( 8,580 ) 52,307 Corporate debt issues: Due after five years through ten years 8,466 — ( 778 ) 7,688 Residential mortgage-backed securities: Fixed rate pass-through 209,069 27 ( 25,222 ) 183,874 Variable rate pass-through 7,140 11 ( 71 ) 7,080 Fixed rate agency CMOs 789,842 — ( 143,055 ) 646,787 Variable rate agency CMOs 23,965 38 ( 453 ) 23,550 Total residential mortgage-backed securities 1,030,016 76 ( 168,801 ) 861,291 Total marketable securities available-for-sale $ 1,240,003 223 ( 196,867 ) 1,043,359 The following table shows the portfolio of marketable securities held-to-maturity at March 31, 2024 (in thousands): Amortized cost Gross unrealized holding gains Gross unrealized holding losses Fair value Debt issued by government-sponsored enterprises: Due after one year through five years $ 89,472 — ( 11,232 ) 78,240 Due after five years through ten years 34,987 — ( 5,877 ) 29,110 Residential mortgage-backed securities: Fixed rate pass-through 144,158 — ( 21,062 ) 123,096 Variable rate pass-through 432 1 — 433 Fixed rate agency CMOs 531,529 — ( 82,578 ) 448,951 Variable rate agency CMOs 529 — ( 6 ) 523 Total residential mortgage-backed securities 676,648 1 ( 103,646 ) 573,003 Total marketable securities held-to-maturity $ 801,107 1 ( 120,755 ) 680,353 8 Table of Contents The following table shows the portfolio of marketable securities held-to-maturity at December 31, 2023 (in thousands): Amortized cost Gross unrealized holding gains Gross unrealized holding losses Fair value Debt issued by government-sponsored enterprises: Due after one year through five years $ 69,471 — ( 8,100 ) 61,371 Due after five years through ten years 54,987 — ( 8,700 ) 46,287 Residential mortgage-backed securities: Fixed rate pass-through 147,874 — ( 20,834 ) 127,040 Variable rate pass-through 449 1 — 450 Fixed rate agency CMOs 541,529 — ( 77,694 ) 463,835 Variable rate agency CMOs 529 — ( 6 ) 523 Total residential mortgage-backed securities 690,381 1 ( 98,534 ) 591,848 Total marketable securities held-to-maturity $ 814,839 1 ( 115,334 ) 699,506 The following table shows the contractual maturity of our residential mortgage-backed securities available-for-sale at March 31, 2024 (in thousands): Amortized cost Fair value Residential mortgage-backed securities: Due within one year $ 116 116 Due after one year through five years 22,934 21,419 Due after five years through ten years 26,966 25,177 Due after ten years 1,039,432 868,155 Total residential mortgage-backed securities $ 1,089,448 914,867 The following table shows the contractual maturity of our residential mortgage-backed securities held-to-maturity at March 31, 2024 (in thousands): Amortized cost Fair value Residential mortgage-backed securities: Due in less than one year $ 38 38 Due after one year through five years 20,144 17,635 Due after five years through ten years 20,209 16,304 Due after ten years 636,257 539,026 Total residential mortgage-backed securities $ 676,648 573,003 The following table shows the fair value of and gross unrealized losses on available-for-sale investment securities and held to maturity investment securities, for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at March 31, 2024 (in thousands): Less than 12 months 12 months or more Total Fair value Unrealized loss Fair value Unrealized loss Fair value Unrealized loss U.S. government-sponsored enterprises $ — — 204,587 ( 34,401 ) 204,587 ( 34,401 ) Municipal securities 498 ( 2 ) 67,691 ( 11,452 ) 68,189 ( 11,454 ) Corporate issues — — 7,634 ( 833 ) 7,634 ( 833 ) Residential mortgage-backed securities - agency 57,715 ( 855 ) 1,380,123 ( 277,512 ) 1,437,838 ( 278,367 ) Total $ 58,213 ( 857 ) 1,660,035 ( 324,198 ) 1,718,248 ( 325,055 ) 9 Table of Contents The following table shows the fair value of and gross unrealized losses on available-for-sale investment securities and held to maturity investment securities, for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2023 (in thousands): Less than 12 months 12 months or more Total Fair value Unrealized loss Fair value Unrealized loss Fair value Unrealized loss U.S. government-sponsored enterprises $ — — 206,569 ( 33,644 ) 206,569 ( 33,644 ) Corporate debt issues — — 7,688 ( 778 ) 7,688 ( 778 ) Municipal securities 2,753 ( 81 ) 66,046 ( 10,363 ) 68,799 ( 10,444 ) Residential mortgage-backed securities - agency 17,976 ( 242 ) 1,423,707 ( 267,093 ) 1,441,683 ( 267,335 ) Total $ 20,729 ( 323 ) 1,704,010 ( 311,878 ) 1,724,739 ( 312,201 ) The Company does not believe that the available-for-sale debt securities that were in an unrealized loss position as of March 31, 2024, which were comprised of 497 individual securities, represents a credit loss impairment. All of these securities were issued by U.S. government agencies, U.S. government-sponsored enterprises, local municipalities, or represent corporate debt. The securities issued by the U.S. government agencies or U.S. government-sponsored enterprises are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. The securities issued by local municipalities and the corporate debt issues were all highly rated by major rating agencies and have no history of credit losses. The unrealized losses were primarily attributable to changes in the interest rate environment and not due to the credit quality of these investment securities. As of March 31, 2024, t he Company does not have the intent to sell these investment securities and it is more likely than not that we will not be required to sell these securities before their anticipated recovery, which may be at maturity. All of the Company ’ s held-to-maturity debt securities are issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. The decline in fair value of the held-to-maturity debt securities were primarily attributable to changes in the interest rate environment and not due to the credit quality of these investment securities, therefore, the Company did not record an allowance for credit losses for these securities as of March 31, 2024. The following table presents the credit quality of our held-to-maturity securities, based on the latest information available as of March 31, 2024 (in thousands). The credit ratings are sourced from nationally recognized rating agencies, which include Moody’s and S&P, and they are presented based on asset type. All of our held-to-maturity securities were current in their payment of principal and interest as of March 31, 2024. AA+ Total Held-to-maturity securities (at amortized cost): Debt issued by the U.S. government-sponsored enterprises $ 124,459 124,459 Residential mortgage-backed securities 676,648 676,648 Total marketable securities held-to-maturity $ 801,107 801,107 10 Table of Contents (3) Loans Receivable The following table shows a summary of our loans receivable at amortized cost basis at March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Originated (1) Acquired (2) Total Originated (1) Acquired (2) Total Personal Banking: Residential mortgage loans (3) $ 3,243,079 139,769 3,382,848 3,283,299 144,886 3,428,185 Home equity loans 1,079,671 116,936 1,196,607 1,103,410 124,448 1,227,858 Vehicle loans 1,944,752 60,104 2,004,856 1,943,540 65,061 2,008,601 Consumer loans 108,035 5,476 113,511 111,446 5,980 117,426 Total Personal Banking 6,375,537 322,285 6,697,822 6,441,695 340,375 6,782,070 Commercial Banking: Commercial real estate loans (4) 2,436,853 227,137 2,663,990 2,389,537 238,920 2,628,457 Commercial real estate loans - owner occupied 338,744 25,794 364,538 319,195 26,358 345,553 Commercial loans 1,743,656 31,240 1,774,896 1,623,481 35,248 1,658,729 Total Commercial Banking 4,519,253 284,171 4,803,424 4,332,213 300,526 4,632,739 Total loans receivable, gross 10,894,790 606,456 11,501,246 10,773,908 640,901 11,414,809 Allowance for credit losses ( 118,837 ) ( 6,060 ) ( 124,897 ) ( 118,079 ) ( 7,164 ) ( 125,243 ) Total loans receivable, net (5) $ 10,775,953 600,396 11,376,349 10,655,829 633,737 11,289,566 (1) Includes originated and loan pools purchased in an asset acquisition. (2) Includes loans subject to purchase accounting in a business combination. (3) Includes $ 8 million and $ 9 million of loans held-for-sale at March 31, 2024 and December 31, 2023, respectively. (4) Includes $ 213,000 and $ 0 of loans held-for-sale at March 31, 2024 and December 31, 2023, respectively. (5) Includes $ 68 million of net unearned income, unamortized premiums and discounts and deferred fees and costs at March 31, 2024 and December 31, 2023. 11 Table of Contents The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the quarter ended March 31, 2024 (in thousands): Balance as of March 31, 2024 Current period provision Charge-offs Recoveries Balance as of December 31, 2023 Allowance for Credit Losses Personal Banking: Residential mortgage loans $ 16,821 ( 1,399 ) ( 162 ) 189 18,193 Home equity loans 5,334 145 ( 412 ) 198 5,403 Vehicle loans 21,061 ( 3,694 ) ( 2,588 ) 432 26,911 Consumer loans 1,452 1,849 ( 1,985 ) 389 1,199 Total Personal Banking 44,668 ( 3,099 ) ( 5,147 ) 1,208 51,706 Commercial Banking: Commercial real estate loans 54,474 3,073 ( 349 ) 483 51,267 Commercial real estate loans - owner occupied 4,055 272 — 8 3,775 Commercial loans 21,700 3,988 ( 1,163 ) 380 18,495 Total Commercial Banking 80,229 7,333 ( 1,512 ) 871 73,537 Total $ 124,897 4,234 ( 6,659 ) 2,079 125,243 Allowance for Credit Losses - off-balance sheet exposure Personal Banking: Residential mortgage loans $ 1 ( 1 ) — — 2 Home equity loans 64 ( 1 ) — — 65 Total Personal Banking 65 ( 2 ) — — 67 Commercial Banking: Commercial real estate loans 6,218 71 — — 6,147 Commercial real estate loans - owner occupied 154 ( 19 ) — — 173 Commercial loans 9,887 ( 849 ) — — 10,736 Total Commercial Banking 16,259 ( 797 ) — — 17,056 Total off-balance sheet exposure $ 16,324 ( 799 ) — — 17,123 12 Table of Contents The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the quarter ended March 31, 2023 (in thousands): Balance as of March 31, 2023 Current period provision Charge-offs Recoveries ASU 2022-02 Adoption Balance as of December 31, 2022 Allowance for Credit Losses Personal Banking: Residential mortgage loans $ 19,238 ( 1 ) ( 207 ) 185 — 19,261 Home equity loans 5,481 ( 450 ) ( 164 ) 193 — 5,902 Vehicle loans 26,166 4,253 ( 1,668 ) 522 — 23,059 Consumer loans 732 796 ( 1,066 ) 337 — 665 Total Personal Banking 51,617 4,598 ( 3,105 ) 1,237 — 48,887 Commercial Banking: Commercial real estate loans 45,404 121 ( 657 ) 1,008 426 44,506 Commercial real estate loans - owner occupied 3,351 ( 674 ) — 21 — 4,004 Commercial loans 20,885 825 ( 865 ) 286 — 20,639 Total Commercial Banking 69,640 272 ( 1,522 ) 1,315 426 69,149 Total $ 121,257 4,870 ( 4,627 ) 2,552 426 118,036 Allowance for Credit Losses - off-balance sheet exposure Personal Banking: Residential mortgage loans $ 3 ( 1 ) — — — 4 Home equity loans 60 ( 14 ) — — — 74 Total Personal Banking 63 ( 15 ) — — — 78 Commercial Banking: Commercial real estate loans 5,924 549 — — — 5,375 Commercial real estate loans - owner occupied 441 62 — — — 379 Commercial loans 6,611 ( 470 ) — — — 7,081 Total Commercial Banking 12,976 141 — — — 12,835 Total off-balance sheet exposure $ 13,039 126 — — — 12,913 13 Table of Contents The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at March 31, 2024 (in thousands): Total loans receivable Allowance for credit losses Nonaccrual loans Loans 90 days past due and accruing Personal Banking: Residential mortgage loans $ 3,382,848 16,821 7,109 1,509 Home equity loans 1,196,607 5,334 4,409 1 Vehicle loans 2,004,856 21,061 4,360 59 Consumer loans 113,511 1,452 269 627 Total Personal Banking 6,697,822 44,668 16,147 2,196 Commercial Banking: Commercial real estate loans 2,663,990 54,474 73,133 — Commercial real estate loans - owner occupied 364,538 4,055 1,319 — Commercial loans 1,774,896 21,700 4,461 256 Total Commercial Banking 4,803,424 80,229 78,913 256 Total $ 11,501,246 124,897 95,060 2,452 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): Total loans receivable Allowance for credit losses Nonaccrual loans Loans 90 days past due and accruing Personal Banking: Residential mortgage loans $ 3,428,185 18,193 8,727 1,671 Home equity loans 1,227,858 5,403 4,492 26 Vehicle loans 2,008,601 26,911 4,816 44 Consumer loans 117,426 1,199 229 722 Total Personal Banking 6,782,070 51,706 18,264 2,463 Commercial Banking: Commercial real estate loans 2,628,457 51,267 71,297 225 Commercial real estate loans - owner occupied 345,553 3,775 676 — Commercial loans 1,658,729 18,495 4,147 10 Total Commercial Banking 4,632,739 73,537 76,120 235 Total $ 11,414,809 125,243 94,384 2,698 14 Table of Contents We present the amortized cost of our loans on nonaccrual status including such loans with no allowance. The following table presents the amortized cost of our loans on nonaccrual status as of the beginning and end of the quarter ended March 31, 2024 (in thousands): March 31, 2024 Nonaccrual loans at January 1, 2024 Nonaccrual loans with an allowance Nonaccrual loans with no allowance Total nonaccrual loans at the end of the period Loans 90 days past due and accruing Personal Banking: Residential mortgage loans $ 8,727 6,703 406 7,109 1,509 Home equity loans 4,492 4,254 155 4,409 1 Vehicle loans 4,816 3,481 879 4,360 59 Consumer loans 229 269 — 269 627 Total Personal Banking 18,264 14,707 1,440 16,147 2,196 Commercial Banking: Commercial real estate loans 71,297 50,794 22,339 73,133 — Commercial real estate loans - owner occupied 676 1,319 — 1,319 — Commercial loans 4,147 4,305 156 4,461 256 Total Commercial Banking 76,120 56,418 22,495 78,913 256 Total $ 94,384 71,125 23,935 95,060 2,452 During the quarter ended March 31, 2024, we did no t recognize any interest income on nonaccrual loans. The following table presents the amortized cost of our loans on nonaccrual status as of the year ended December 31, 2023 (in thousands): December 31, 2023 Nonaccrual loans at January 1, 2023 Nonaccrual loans with an allowance Nonaccrual loans with no allowance Total nonaccrual loans at the end of the period Loans 90 days past due and accruing Personal Banking: Residential mortgage loans $ 7,574 8,304 423 8,727 1,671 Home equity loans 4,145 4,084 408 4,492 26 Vehicle loans 3,771 4,187 629 4,816 44 Consumer loans 256 229 — 229 722 Total Personal Banking 15,746 16,804 1,460 18,264 2,463 Commercial Banking: Commercial real estate loans 62,239 47,359 23,938 71,297 225 Commercial real estate loans - owner occupied 624 676 — 676 — Commercial loans 2,627 3,996 151 4,147 10 Total Commercial Banking 65,490 52,031 24,089 76,120 235 Total $ 81,236 68,835 25,549 94,384 2,698 During the year ended December 31, 2023, we did not recognize any interest income on nonaccrual loans. 15 Table of Contents 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 and collateral type as of as of March 31, 2024 (in thousands): Real estate Equipment Total Commercial Banking: Commercial real estate loans $ 66,587 1,256 67,843 Commercial loans 146 — 146 Total Commercial Banking 66,733 1,256 67,989 Total $ 66,733 1,256 67,989 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 Total Commercial Banking: Commercial real estate loans $ 66,934 66,934 Commercial loans 150 150 Total Commercial Banking 67,084 67,084 Total $ 67,084 67,084 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 for the periods indicated that were both experiencing financial difficulty and modified during the respective period, 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). For the quarter ended March 31, 2024 2023 Payment delay Term extension Combination term extension and interest rate reduction Total class of financing receivable Term extension Combination term extension and interest rate reduction Total class of financing receivable Personal Banking: Residential mortgage loans $ 364 490 — 0.03 % 180 — 0.01 % Home equity loans — 552 84 0.05 % 110 — 0.01 % Consumer loans — — 2 — % — 3 — % Total Personal Banking 364 1,042 86 0.02 % 290 3 — % Commercial Banking: Commercial real estate loans 28,877 243 — 1.09 % 242 — 0.01 % Commercial loans — 56 10 — % 765 — 0.06 % Total Commercial Banking 28,877 299 10 0.61 % 1,007 — 0.02 % Total $ 29,241 1,341 96 0.27 % 1,297 3 0.01 % 16 Table of Contents As of March 31, 2024 and December 31, 2023, t he Company has committed to lend additional amounts totaling $ 41,000 and $ 31,000 , respectively, to the borrowers experiencing financial difficulty for which the terms of the loan have been modified. The following table presents the effect of the loan modifications presented above to borrowers experiencing financial difficulty for the periods indicated: For the quarter ended March 31, 2024 2023 Weighted-average interest rate reduction Weighted-average term extension in months Weighted-average payment deferral in years Weighted-average interest rate reduction Weighted-average term extension in months Personal Banking: Residential mortgage loans — % 143 0.50 — % 147 Home equity loans 2 % 97 — — % 115 Consumer loans 12 % 356 — 12 % 356 Total Personal Banking 3 % 118 0.50 12 % 137 Commercial Banking: Commercial real estate loans — % 106 1.00 — % 24 Commercial loans 4 % 118 — — % 9 Total Commercial Banking 4 % 108 1.00 — % 13 Total loans 3 % 116 1.00 12 % 41 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 modified within the previous twelve months of March 31, 2024 : Current 30-59 days delinquent 60-89 days delinquent 90 days or greater delinquent Personal Banking: Residential mortgage loans $ 406 84 — 364 Home equity loans 616 3 — 17 Consumer loans 2 — — — Total Personal Banking 1,024 87 — 381 Commercial Banking: Commercial real estate loans 29,121 — — — Commercial loans 10 9 47 — Total Commercial Banking 29,131 9 47 — Total loans $ 30,155 96 47 381 All loans modified since the adoption of ASU 2022-02 were current on their payments as of March 31, 2023. A modification is considered to be in default when the loan is 90 days or more past due. The following table provides the amortized cost basis of financing receivables that had a payment default during the period ended March 31, 2024 and were modified within the previous twelve months to borrowers experiencing financial difficulty (in thousands) : Term extension Payment delay Personal Banking: Residential mortgage loans $ — $ 364 Home equity loans 17 — Total Personal Banking 17 364 Total $ 17 $ 364 No loans modified since the adoption of ASU 2022-02 subsequently defaulted during the quarter ended March 31, 2023. 17 Table of Contents 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 information related to the amortized cost basis of loan payment delinquencies at March 31, 2024 (in thousands): 30-59 days delinquent 60-89 days delinquent 90 days or greater delinquent Total delinquency Current Total loans receivable 90 days or greater delinquent and accruing Personal Banking: Residential mortgage loans $ 38,502 70 5,813 44,385 3,338,463 3,382,848 1,509 Home equity loans 4,608 761 2,823 8,192 1,188,415 1,196,607 1 Vehicle loans 9,177 2,246 2,496 13,919 1,990,937 2,004,856 59 Consumer loans 734 299 849 1,882 111,629 113,511 627 Total Personal Banking 53,021 3,376 11,981 68,378 6,629,444 6,697,822 2,196 Commercial Banking: Commercial real estate loans 6,181 807 6,041 13,029 2,650,961 2,663,990 — Commercial real estate loans - owner occupied 215 — 890 1,105 363,433 364,538 — Commercial loans 3,091 1,284 3,421 7,796 1,767,100 1,774,896 256 Total Commercial Banking 9,487 2,091 10,352 21,930 4,781,494 4,803,424 256 Total loans $ 62,508 5,467 22,333 90,308 11,410,938 11,501,246 2,452 The following table provides information related to the amortized cost basis of loan payment delinquencies at December 31, 2023 (in thousands): 30-59 days delinquent 60-89 days delinquent 90 days or greater delinquent Total delinquency Current Total loans receivable 90 days or greater delinquent and accruing Personal Banking: Residential mortgage loans $ 30,041 7,796 7,995 45,832 3,382,353 3,428,185 1,671 Home equity loans 5,761 982 3,126 9,869 1,217,989 1,227,858 26 Vehicle loans 10,382 3,326 3,051 16,759 1,991,842 2,008,601 44 Consumer loans 829 428 927 2,184 115,242 117,426 722 Total Personal Banking 47,013 12,532 15,099 74,644 6,707,426 6,782,070 2,463 Commercial Banking: Commercial real estate loans 2,010 1,031 6,535 9,576 2,618,881 2,628,457 225 Commercial real estate loans - owner occupied 1,194 — 177 1,371 344,182 345,553 — Commercial loans 4,196 703 2,780 7,679 1,651,050 1,658,729 10 Total Commercial Banking 7,400 1,734 9,492 18,626 4,614,113 4,632,739 235 Total originated loans $ 54,413 14,266 24,591 93,270 11,321,539 11,414,809 2,698 18 Table of Contents Credit Quality Indicators: For Commercial Banking we categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. We analyze loans individually by classifying the loans by credit risk. Credit relationships greater than or equal to $ 1.0 million classified as special mention or substandard are reviewed quarterly for deterioration or improvement to determine if the loan is appropriately classified. We use the following definitions for risk ratings other than pass: Special Mention — Loans designated as special mention have specific, well-defined risk issues, which create a high level of uncertainty regarding the long-term viability of the business. Loans in this class are considered to have high-risk characteristics. A special mention loan exhibits material negative financial trends due to company-specific or systemic conditions. If these potential weaknesses are not mitigated, they threaten the borrower’s capacity to meet its debt obligations. Special mention loans still demonstrate sufficient financial flexibility to react to and positively address the root cause of the adverse financial trends without significant deviations from their current business strategy. Their potential weaknesses deserve our close attention and warrant enhanced monitoring. Substandard — Loans classified as substandard are inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Doubtful — Loans classified as doubtful have all the weaknesses inherent in those classified as substandard. In addition, those weaknesses make collection or liquidation in full highly questionable and improbable. A loan classified as doubtful exhibits discernible loss potential, but a complete loss seems very unlikely. The possibility of a loss on a doubtful loan is high, but because of certain important and reasonably specific pending factors that may strengthen the loan, its classification as an estimated loss is deferred until a more exact status can be determined. Loss — Loans classified as loss are considered uncollectible and of such value that the continuance as a loan is not warranted. A loss classification does not mean that the loan has no recovery or salvage value; instead, it means that it is not practical or desirable to defer writing off all or a portion of a basically worthless loan even though partial recovery may be possible in the future. For Personal Banking loans a pass risk rating is maintained until they are 90 days or greater past due, and risk rating reclassification is based primarily on past due status of the loan. The risk rating categories can generally be described by the following groupings: Pass — Loans classified as pass are homogeneous loans that are less than 90 days past due from the required payment date at month-end. Substandard — Loans classified as substandard are homogeneous loans that are greater than 90 days past due from the required payment date at month-end, or homogenous retail loans that are greater than 180 days past due from the required payment date at month-end that has been written down to the value of underlying collateral, less costs to sell. Doubtful — Loans classified as doubtful are homogeneous loans that are greater than 180 days past due from the required payment date at month-end and not written down to the value of underlying collateral. These loans are generally charged-off in the month in which the 180 day period elapses. 19 Table of Contents 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 March 31, 2024 (in thousands): YTD March 31, 2024 2023 2022 2021 2020 Prior Revolving loans Revolving loans converted to term loans Total loans receivable Personal Banking: Residential mortgage loans Pass $ 7,577 192,489 660,443 782,217 496,755 1,230,826 — — 3,370,307 Substandard — 89 2,551 357 1,208 8,336 — — 12,541 Total residential mortgage loans 7,577 192,578 662,994 782,574 497,963 1,239,162 — — 3,382,848 Residential mortgage current period charge-offs — — — — ( 113 ) ( 49 ) — — ( 162 ) Home equity loans Pass 5,488 67,059 97,697 101,645 140,326 276,751 460,391 42,600 1,191,957 Substandard — — 98 54 197 2,027 1,086 1,188 4,650 Total home equity loans 5,488 67,059 97,795 101,699 140,523 278,778 461,477 43,788 1,196,607 Home equity current period charge-offs — — ( 35 ) ( 2 ) — ( 154 ) ( 189 ) ( 32 ) ( 412 ) Vehicle loans Pass 196,998 615,730 618,045 351,286 113,020 105,357 — — 2,000,436 Substandard — 753 1,310 1,274 257 826 — — 4,420 Total vehicle loans 196,998 616,483 619,355 352,560 113,277 106,183 — — 2,004,856 Vehicle current period charge-offs — ( 715 ) ( 664 ) ( 748 ) ( 117 ) ( 344 ) — — ( 2,588 ) Consumer loans Pass 7,204 21,506 10,028 4,627 1,667 5,099 61,766 717 112,614 Substandard — 51 63 9 — 51 622 101 897 Total consumer loans 7,204 21,557 10,091 4,636 1,667 5,150 62,388 818 113,511 Consumer loan current period charge-offs ( 13 ) ( 1,263 ) ( 139 ) ( 83 ) ( 13 ) ( 247 ) ( 206 ) ( 21 ) ( 1,985 ) Total Personal Banking 217,267 897,677 1,390,235 1,241,469 753,430 1,629,273 523,865 44,606 6,697,822 Commercial Banking: Commercial real estate loans Pass 62,822 232,766 496,664 303,781 319,596 931,515 28,002 24,423 2,399,569 Special mention — 2,831 24,683 27,294 7,111 28,946 733 — 91,598 Substandard 1,256 1,909 2,779 29,626 19,575 117,501 78 99 172,823 Total commercial real estate loans 64,078 237,506 524,126 360,701 346,282 1,077,962 28,813 24,522 2,663,990 Commercial real estate current period charge-offs — — ( 44 ) — — ( 305 ) — — ( 349 ) Commercial real estate loans - owner occupied Pass 22,976 12,903 51,065 47,955 13,886 163,028 2,171 1,304 315,288 Special mention — 13,365 2,381 1,210 1,728 20,965 — — 39,649 Substandard — — — 111 1,647 6,145 — 1,698 9,601 Total commercial real estate loans - owner occupied 22,976 26,268 53,446 49,276 17,261 190,138 2,171 3,002 364,538 Commercial real estate - owner occupied current period charge-offs — — — — — — — — — Commercial loans Pass 203,185 424,258 402,658 67,493 24,976 79,847 492,660 3,442 1,698,519 Special mention 8,019 31,014 3,860 4 298 217 9,045 4 52,461 Substandard — 8,050 3,954 886 222 3,162 3,884 3,758 23,916 Total commercial loans 211,204 463,322 410,472 68,383 25,496 83,226 505,589 7,204 1,774,896 Commercial loans current period charge-offs — ( 47 ) ( 734 ) ( 75 ) ( 175 ) ( 132 ) — — ( 1,163 ) Total Commercial Banking 298,258 727,096 988,044 478,360 389,039 1,351,326 536,573 34,728 4,803,424 Total loans $ 515,525 1,624,773 2,378,279 1,719,829 1,142,469 2,980,599 1,060,438 79,334 11,501,246 For the quarter ended March 31, 2024, $ 3 million of revolving loans were converted to term loans. 20 Table of Contents The following table presents the amortized cost basis of our loan portfolio by year of origination and credit quality indicator for each portfolio segment as of December 31, 2023 (in thousands): 2023 2022 2021 2020 2019 Prior Revolving loans Revolving loans converted to term loans Total loans receivable Personal Banking: Residential mortgage loans Pass $ 186,081 665,379 792,488 506,068 244,678 1,019,152 — — 3,413,846 Substandard — 1,581 — 1,252 311 11,195 — — 14,339 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 Pass 71,497 100,639 106,043 146,121 94,144 197,259 463,868 43,526 1,223,097 Substandard — 236 54 197 35 1,733 1,447 1,059 4,761 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 Pass 664,876 682,275 397,809 132,775 67,853 58,153 — — 2,003,741 Substandard 646 1,418 1,453 299 556 488 — — 4,860 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 Pass 24,277 11,582 5,552 2,072 1,355 6,603 64,214 820 116,475 Substandard 55 43 19 6 6 46 726 50 951 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 Commercial Banking: Commercial real estate loans Pass 223,335 470,762 303,873 332,620 228,382 745,244 27,583 24,804 2,356,603 Special Mention 2,819 24,735 27,871 5,365 4,053 38,665 711 — 104,219 Substandard 1,920 750 26,850 18,167 37,044 82,717 79 108 167,635 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 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 Special Mention 1,221 120 1,218 — 14,386 2,952 — — 19,897 Substandard — — 118 1,666 4,646 4,641 — 678 11,749 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 Pass 482,605 430,378 73,469 26,868 34,090 54,617 531,742 4,110 1,637,879 Special Mention 508 3,671 52 299 240 26 1,882 — 6,678 Substandard — 3,015 872 356 2,361 840 4,729 1,999 14,172 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 Commercial Banking 737,133 985,417 481,978 401,325 353,816 1,069,877 569,104 34,089 4,632,739 Total loans $ 1,684,565 2,448,570 1,785,396 1,190,115 762,754 2,364,506 1,099,359 79,544 11,414,809 For the year ended December 31, 2023, $ 19 million of revolving loans were converted to term loans. 21 Table of Contents (4) Goodwill and Other Intangible Assets The following table provides information for intangible assets subject to amortization at the dates indicated (in thousands): March 31, 2024 December 31, 2023 Amortizable intangible assets: Core deposit intangibles - gross $ 74,899 74,899 Less: accumulated amortization ( 70,310 ) ( 69,609 ) Core deposit intangibles - net $ 4,589 5,290 Total intangible assets - net $ 4,589 5,290 The following table shows the actual aggregate amortization expense for the quarters ended March 31, 2024 and 2023, as well as the estimated aggregate amortization expense, based upon current levels of intangible assets, for the current fiscal year and each of the succeeding fiscal years until the intangible assets are fully amortized (in thousands): For the quarter ended March 31, 2024 $ 701 For the quarter ended March 31, 2023 909 For the year ending December 31, 2024 2,452 For the year ending December 31, 2025 1,662 For the year ending December 31, 2026 871 For the year ending December 31, 2027 305 The following table provides information for the changes in the carrying amount of goodwill (in thousands): Total Balance at December 31, 2023 $ 380,997 Balance at March 31, 2024 $ 380,997 We performed our annual goodwill impairment test as of June 30, 2023 in accordance with ASC 350, Intangibles - Goodwill and Other, and concluded that goodwill was not impaired. (5) Borrowed Funds (a) Borrowings Borrowed funds at March 31, 2024 and December 31, 2023 are presented in the following table: March 31, 2024 December 31, 2023 Amount Average rate Amount Average rate Term notes payable to the FHLB of Pittsburgh, due within one year $ 275,000 5.65 % $ 175,000 5.71 % Notes payable to the FHLB of Pittsburgh, due within one year 55,600 5.67 % 163,500 5.70 % Collateralized borrowings, due within one year 29,882 1.62 % 35,495 1.72 % Collateral received, due within one year 40,301 5.08 % 24,900 5.26 % Total borrowed funds $ 400,783 $ 398,895 Borrowings from the Federal Home Loan Bank (“FHLB”) of Pittsburgh, if any, are secured by our residential first mortgage and other qualifying loans. At March 31, 2024, the carrying value of these loans was $ 6.0 billion. Certain of these borrowings are subject to restrictions or penalties in the event of prepayment. The revolving line of credit with the FHLB of Pittsburgh carries a commitment of $ 250 million. The rate is adjusted daily by the FHLB of Pittsburgh, and any borrowings on this line may be repaid at any time without penalty. At March 31, 2024 and December 31, 2023, the balance of the revolving line of credit was $ 56 million and $ 164 million, respectively. At March 31, 2024 and December 31, 2023, collateralized borrowings due within one year were $ 30 million and $ 35 million, respectively. These borrowings are collateralized by cash or va rious securities held in safekeeping by the FHLB. At March 31, 2024, the carrying value of the cash and securities used as collateral was $ 50 million. At March 31, 2024 and December 31, 2023, collateral received was $ 40 million and $ 25 million, respectively. This represents collateral posted to us from our derivative counterparties. 22 Table of Contents At March 31, 2024 and December 31, 2023, term notes payable to the FHLB of Pittsburgh due within one year were $ 275 million and $ 175 million, respectively. The March 31, 2024 total is made up of eight advances: $ 100 million at 5.68 % maturing April 5, 2024; $ 25 million at 5.63 % maturing April 26, 2024; $ 25 million at 5.61 % maturing April 30, 2024; $ 25 million at 5.65 % maturing May 9, 2024; $ 25 million at 5.64 % maturing May 13, 2024; $ 25 million at 5.64 % maturing May 13, 2024; $ 25 million at 5.63 % maturing May 20, 2024; $ 25 million at 5.63 % maturing May 31, 2024. On September 9, 2020, the Company issued $ 125 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, 2023 the Company repurchased $ 10 million of subordinated notes leaving $ 115 million of subordinated notes outstanding. The subordinated debt issuance costs of approximately $ 2 million are being amortized over five years on a straight-line basis into interest expense. At March 31, 2024 and December 31, 2023, subordinated debentures, net of issuance costs, were $ 114 million. For the three months ended March 31, 2024 and March 31, 2023 total interest expense paid on the subordinate notes was $ 1.2 million. (b) Trust Preferred Securities The Company has seven statutory business trusts: Northwest Bancorp Capital Trust III, a Delaware statutory business trust, Northwest Bancorp Statutory Trust IV, a Connecticut statutory business trust, LNB Trust II, a Delaware statutory business trust, Union National Capital Trust I (“UNCT I”), a Delaware statutory business trust, Union National Capital Trust II (“UNCT II”), a Delaware statutory business trust, MFBC Statutory Trust I, a Delaware statutory trust, and Universal Preferred Trust, a Delaware statutory trust (the “Trusts”). The Trusts exist solely to issue preferred securities to third parties for cash, issue common securities to the Company in exchange for capitalization of the Trusts, invest the proceeds from the sale of trust securities in an equivalent amount of debentures of the Company, and engage in other activities that are incidental to those previously listed. The Trusts have invested the proceeds of the offerings in junior subordinated deferrable interest debentures issued by the Company. The structure of these debentures mirrors the structure of the trust-preferred securities. These subordinated debentures are the sole assets of the Trusts. As the shareholders of the trust preferred securities are the primary beneficiaries of the Trusts, the Trusts are not consolidated in our financial statements. The following table sets forth a summary of the cumulative trust preferred securities and the junior subordinated debt held by the Trust as of the date listed (dollars in thousands). Maturity date Interest rate Capital debt securities March 31, 2024 December 31, 2023 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 SOFR plus 1.38 % 50,000 51,547 51,547 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 SOFR plus 2.85 % 8,000 8,005 7,999 Union National Capital Trust II (1) November 23, 2034 3-month SOFR plus 2.00 % 3,000 2,803 2,796 MFBC Statutory Trust I (1) September 15, 2035 3-month SOFR plus 1.70 % 5,000 3,814 3,788 Universal Preferred Trust (1) October 7, 2035 3-month SOFR plus 1.69 % 5,000 3,804 3,778 $ 128,875 129,639 129,574 (1) Net of discounts due to the fair value adjustment made at the time of acquisition. Cash distributions on the trust securities are made on a quarterly basis to the extent interest on the debentures is received by the Trusts. We have the right to defer payment of interest on the subordinated debentures at any time, or from time-to-time, for periods not exceeding five years . If interest payments on the subordinated debentures are deferred, the distributions on the trust securities also are deferred. To date there have been no interest deferrals. Interest on the subordinated debentures and distributions on the trust securities is cumulative. Our obligation constitutes a full, irrevocable, and unconditional guarantee on a subordinated basis of the obligations of the trust under the preferred securities. For each of the three month periods ended March 31, 2024 and March 31, 2023 total interest expense paid on trust preferred securities was $ 2 million. 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. All or part of the debentures may be redeemed at any time. Also, the debentures may be redeemed at any time if existing laws or regulations, or the interpretation or application of these laws or regulations, change causing: • the interest on the debentures to no longer be deductible by the Company for federal income tax purposes; 23 Table of Contents • the trusts to become subject to federal income tax or to certain other taxes or governmental charges; • the trusts to register as an investment company; or • the preferred securities to no longer 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 approvals. (6) Guarantees We issue standby letters of credit in the normal course of business. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party. We are required to perform under a standby letter of credit when drawn upon by the guaranteed third party in the case of nonperformance by our customer. The credit risk associated with standby letters of credit is essentially the same as that involved in extending loans to customers and is subject to normal loan underwriting procedures. Collateral may be obtained based on management’s credit assessment of the customer. At March 31, 2024, the maximum potential amount of future payments we could be required to make under these non-recourse standby letters of credit was $ 60 million, of which $ 43 million is fully collateralized. At March 31, 2024, we had a liability which represents deferred income of $ 1 million related to the standby letters of credit. In addition, we maintain a $ 10 million unsecured line of credit with a correspondent bank for private label credit card facilities for certain existing commercial clients of the Bank, of which $ 9 million in notional value of credit cards have been issued. These issued credit cards had an outstanding balance of $ 1 million at March 31, 2024. The clients of the Bank are responsible for repaying any balances due on these credit cards directly to the correspondent bank; however, if the customer fails to repay their balance, the Bank could be required to satisfy the obligation to correspondent bank and initiate collection from our customer as part of the existing credit facility of that customer. (7) Earnings Per Share Basic earnings per common share (“EPS”) is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period, without considering any dilutive items. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. The following table sets forth the computation of basic and diluted EPS (in thousands, except share data and per share amounts): Quarter ended March 31, 2024 2023 Net income $ 29,163 33,679 Less: Dividends and undistributed earnings allocated to participating securities 74 146 Net income available to common shareholders $ 29,089 33,533 Weighted average common shares outstanding 126,814,233 126,498,512 Add: Effect of common share options and other stock awards 784,738 551,751 Total weighted average common shares and dilutive potential shares 127,598,971 127,050,263 Basic earnings per share $ 0.23 0.27 Diluted earnings per share $ 0.23 0.26 24 Table of Contents (8) Pension and Other Post-Retirement Benefits The following table sets forth the net periodic costs for the defined benefit pension plans and post-retirement healthcare plans for the periods indicated (in thousands): Quarter ended March 31, Pension benefits Other post-retirement benefits 2024 2023 2024 2023 Service cost $ 1,425 1,560 — — Interest cost 2,205 2,245 15 7 Expected return on plan assets ( 3,776 ) ( 3,479 ) — — Amortization of prior service cost ( 563 ) ( 564 ) — — Amortization of the net loss 18 20 10 10 Net periodic cost $ ( 691 ) ( 218 ) 25 17 Because of the current funding status, we do not anticipate a funding requirement during the year ending December 31, 2024. (9) Disclosures About Fair Value of Financial Instruments We are required to disclose fair value information about financial instruments whether or not recognized in the Consolidated Statement of Financial Condition. Fair value information of certain financial instruments and all nonfinancial instruments is not required to be disclosed. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. Financial assets and liabilities recognized or disclosed at fair value on a recurring basis and certain financial assets and liabilities on a non-recurring basis are accounted for using a three-level hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. This hierarchy gives the highest priority to quoted prices with readily available independent data in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable market inputs (Level 3). When various inputs for measurement fall within different levels of the fair value hierarchy, the lowest level input that has a significant impact on fair value measurement is used. Financial assets and liabilities are categorized based upon the following characteristics or inputs to the valuation techniques: • Level 1 - Financial assets and liabilities for which inputs are observable and are obtained from reliable quoted prices for identical assets or liabilities in actively traded markets. This is the most reliable fair value measurement and includes, for example, active exchange-traded equity securities. • Level 2 - Financial assets and liabilities for which values are based on quoted prices in markets that are not active or for which values are based on similar assets or liabilities that are actively traded. Level 2 also includes pricing models in which the inputs are corroborated by market data, for example, matrix pricing. • Level 3 - Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Level 3 inputs include the following: ◦ Quotes from brokers or other external sources that are not considered binding; ◦ 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; and ◦ 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. We perform due diligence to understand the inputs used or how the data was calculated or derived. 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: cash and cash equivalents, marketable securities available-for-sale, 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. 25 Table of Contents Marketable Securities Where available, market values are based on quoted market prices, dealer quotes, and prices obtained from independent pricing services. Debt Securities — available-for-sale - Generally, debt securities are valued using pricing for similar securities, recently executed transactions and other pricing models utilizing observable inputs. The valuation for most debt securities is classified as Level 2. Securities within Level 2 include corporate bonds, municipal bonds, mortgage-backed securities and U.S. government obligations. Certain debt securities which were AAA rated at purchase do not have an active market, and as such we have used an alternative method to determine the fair value of these securities. The fair value has been determined using a discounted cash flow model using market assumptions, which generally include cash flow, collateral and other market assumptions. As such, securities which otherwise would have been classified as Level 2 securities if an active market for those assets or similar assets existed are included herein as Level 3 assets. Debt Securities — held-to-maturity - The fair value of debt securities held-to-maturity is determined in the same manner as debt securities available-for-sale. Loans Receivable Loans with comparable characteristics including collateral and re-pricing structures are segregated for valuation purposes. Each loan pool is separately valued utilizing a discounted cash flow analysis. Projected monthly cash flows are discounted to present value using a market rate for comparable loans, which is not considered an exit price. Characteristics of comparable loans include remaining term, coupon interest, and estimated prepayment speeds. Delinquent loans are separately evaluated given the impact delinquency has on the projected future cash flow of the loan including the approximate discount or market rate, which is not considered an exit price. Loans Held-for-Sale The estimated fair value of loans held-for-sale is based on market bids obtained from potential buyers. FHLB Stock Due to the restrictions placed on transferability of FHLB stock, it is not practical to determine the fair value. FHLB stock is recorded at cost. Deposit Liabilities The estimated fair value of deposits with no stated maturity, which includes demand deposits, money market, and other savings accounts, is the amount payable on demand. Although market premiums paid for depository institutions reflect an additional value for these low-cost deposits, adjusting fair value for any value expected to be derived from retaining those deposits for a future period of time or from the benefit that results from the ability to fund interest-earning assets with these deposit liabilities is prohibited. The fair value estimates of deposit liabilities do not include the benefit that results from the low-cost funding provided by these deposits compared to the cost of borrowing funds in the market. Fair values for time deposits are estimated using a discounted cash flow calculation that applies contractual cost currently being offered in the existing portfolio to current market rates being offered locally for deposits of similar remaining maturities. 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 Fixed rate advances are valued by comparing their contractual cost to the prevailing market cost. The carrying amount of repurchase agreements approximates their fair value. Subordinated Debentures The fair value of our subordinated debentures is calculated using the discounted cash flows at rates observable for other similarly traded liabilities. 26 Table of Contents Junior Subordinated Debentures The fair value of junior subordinated debentures is calculated using the discounted cash flows at the prevailing rate of interest. Interest Rate Lock Commitments and Forward Commitments The fair value of interest rate lock commitments is based on the value of underlying loans held-for-sale which is based on quoted prices for similar loans in the secondary market. This value is then adjusted based on the probability of the loan closing (i.e., the “pull-through” amount, a significant unobservable input). The fair value of forward sale commitments is based on quoted prices from the secondary market based on the settlement date of the contracts. Cash Flow Hedges, Interest Rate and Foreign Exchange Swap Agreements 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 SOFR zero-coupon interest rates. The sum of the present value of both legs is the fair market value of the interest rate swap. These valuations have been derived from our third party vendor’s proprietary models rather than actual market quotations. The proprietary models are based upon financial principles and assumptions that we believe to be reasonable. The fair value of the foreign exchange swap is derived from proprietary models rather than actual market quotations. The proprietary models are based upon financial principles and assumptions that we believe to be reasonable. Risk participation agreements are entered into when Northwest purchases a portion of a commercial loan that has an interest rate swap. Northwest assumes credit risk on its portion of the interest rate swap should the borrower fail to pay as agreed. The value of risk participation agreements is determined based on the value of the swap after considering the credit quality, probability of default, and loss given default of the borrower. Off-Balance Sheet Financial Instruments These financial instruments generally are not sold or traded, and estimated fair values are not readily available. However, the fair value of commitments to extend credit and standby letters of credit is estimated using the fees currently charged to enter into similar agreements. Commitments to extend credit are generally short-term in nature and, if drawn upon, are issued under current market terms. At March 31, 2024 and December 31, 2023, there was no significant unrealized appreciation or depreciation on these financial instruments. 27 Table of Contents The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the Consolidated Statement of Financial Condition at March 31, 2024 (in thousands): Carrying amount Estimated fair value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 119,319 119,319 119,319 — — Securities available-for-sale 1,094,009 1,094,009 — 1,094,009 — Securities held-to-maturity 801,107 680,353 — 680,353 — Loans receivable, net 11,368,267 10,370,310 — — 10,370,310 Loans held-for-sale 8,082 8,082 — 213 7,869 Accrued interest receivable 50,680 50,680 50,680 — — Interest rate lock commitments 479 479 — — 479 Forward commitments 58 58 — 58 — Foreign exchange swaps 2 2 — 2 — Interest rate swaps designated as hedging instruments 2,300 2,300 — 2,300 — Interest rate swaps not designated as hedging instruments 45,188 45,188 — 45,188 — FHLB stock 30,811 30,811 — — — Total financial assets $ 13,520,302 12,401,591 169,999 1,822,123 10,378,658 Financial liabilities: Savings and checking deposits $ 9,284,830 9,284,830 9,284,830 — — Time deposits 2,786,814 2,333,365 — — 2,333,365 Borrowed funds 400,783 389,997 389,997 — — Subordinated debt 114,276 112,027 — 112,027 — Junior subordinated debentures 129,639 123,167 — — 123,167 Interest rate swaps not designated as hedging instruments 45,220 45,220 — 45,220 — Risk participation agreements 17 17 — 17 — Accrued interest payable 17,395 17,395 17,395 — — Total financial liabilities $ 12,778,974 12,306,018 9,692,222 157,264 2,456,532 28 Table of Contents 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 (in thousands): Carrying amount Estimated fair value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 122,260 122,260 122,260 — — Securities available-for-sale 1,043,359 1,043,359 — 1,043,359 — Securities held-to-maturity 814,839 699,506 — 699,506 — Loans receivable, net 11,280,798 10,274,593 — — 10,274,593 Residential mortgage loans held-for-sale 8,768 8,768 — — 8,768 Accrued interest receivable 47,353 47,353 47,353 — — Interest rate lock commitments 641 641 — — 641 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 — FHLB stock 30,146 30,146 — — — Total financial assets $ 13,390,295 12,268,757 169,613 1,784,996 10,284,002 Financial liabilities: Savings and checking accounts $ 9,377,021 9,377,021 9,377,021 — — Time deposits 2,602,881 2,113,177 — — 2,113,177 Borrowed funds 398,895 386,446 386,446 — — Subordinated debt 114,189 109,471 — 109,471 — Junior subordinated debentures 129,574 112,159 — — 112,159 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 — Risk participation agreements 14 14 — 14 — Accrued interest payable 13,669 13,669 13,669 — — Total financial liabilities $ 12,679,169 12,154,883 9,777,136 152,411 2,225,336 Fair value estimates are made at a point-in-time, based on relevant market data and information about the instrument. The methods and assumptions detailed above were used in estimating the fair value of financial instruments at both March 31, 2024 and December 31, 2023. 29 Table of Contents The following table represents assets and liabilities measured at fair value on a recurring basis at March 31, 2024 (in thousands): Level 1 Level 2 Level 3 Total assets at fair value Debt securities: U.S. government and agencies $ — 56,718 — 56,718 Government-sponsored enterprises — 40,519 — 40,519 States and political subdivisions — 74,271 — 74,271 Corporate — 7,634 — 7,634 Total debt securities — 179,142 — 179,142 Residential mortgage-backed securities: GNMA — 31,305 — 31,305 FNMA — 98,861 — 98,861 FHLMC — 82,746 — 82,746 Non-agency — 5 — 5 Collateralized mortgage obligations: GNMA — 374,391 — 374,391 FNMA — 144,489 — 144,489 FHLMC — 183,070 — 183,070 Total mortgage-backed securities — 914,867 — 914,867 Interest rate lock commitments — — 479 479 Forward commitments — 58 — 58 Foreign exchange swaps — 2 — 2 Interest rate swaps designated as hedging instruments — 2,300 — 2,300 Interest rate swaps not designated as hedging instruments — 45,188 — 45,188 Total assets $ — 1,141,557 479 1,142,036 Interest rate swaps not designated as hedging instruments — 45,220 — 45,220 Risk participation agreements — 17 — 17 Total liabilities $ — 45,237 — 45,237 30 Table of Contents The following table represents assets and liabilities measured at fair value on a recurring basis at December 31, 2023 (in thousands): Level 1 Level 2 Level 3 Total assets at fair value Debt securities: U.S. government and agencies $ — 58,314 — 58,314 Government-sponsored enterprises — 40,597 — 40,597 States and political subdivisions — 75,469 — 75,469 Corporate — 7,688 — 7,688 Total debt securities — 182,068 — 182,068 Residential mortgage-backed securities: GNMA — 17,441 — 17,441 FNMA — 102,678 — 102,678 FHLMC — 70,830 — 70,830 Non-agency — 5 — 5 Collateralized mortgage obligations: GNMA — 331,784 — 331,784 FNMA — 148,892 — 148,892 FHLMC — 189,661 — 189,661 Total mortgage-backed securities — 861,291 — 861,291 Interest rate lock commitments — — 641 641 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 Total assets $ — 1,085,490 641 1,086,131 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 Risk participation agreements — 14 — 14 Total liabilities $ — 42,940 — 42,940 The following table presents the changes in Level 3 assets and liabilities measured at fair value on a recurring basis (in thousands): For the quarter ended March 31, 2024 2023 Beginning balance, $ 641 559 Interest rate lock commitments: Net activity ( 162 ) ( 173 ) Ending balance $ 479 386 Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans held-for-sale, loans individually assessed, real estate owned, and mortgage servicing rights. 31 Table of Contents The following table represents the fair market measurement for only those nonrecurring assets that had a fair market value below the carrying amount as of March 31, 2024 (in thousands): Level 1 Level 2 Level 3 Total assets at fair value Loans individually assessed $ — — 39,123 39,123 Mortgage servicing rights — — 173 173 Real estate owned, net — — 50 50 Total assets $ — — 39,346 39,346 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, 2023 (in thousands): Level 1 Level 2 Level 3 Total assets at fair value Loans individually assessed $ — — 36,747 36,747 Mortgage servicing rights — — 133 133 Real estate owned, net — — 104 104 Total assets $ — — 36,984 36,984 Individually Assessed Loans - A loan is considered to be individually assessed as described in Note 1(f) of the Notes to the Consolidated Financial Statements in Item 8 of Part II of our 2023 Annual Report on Form 10-K. We classify loans individually assessed as nonrecurring Level 3. Mortgage servicing rights - Mortgage servicing rights represent the value of servicing residential mortgage loans, when the mortgage loans have been sold into the secondary market and the associated servicing has been retained. The value is determined through a discounted cash flow analysis, which uses interest rates, prepayment speeds and delinquency rate assumptions as inputs. All of these assumptions require a significant degree of management judgment. Servicing rights and the related mortgage loans are segregated into categories or homogeneous pools based upon common characteristics. Adjustments are only made when the estimated discounted future cash flows are less than the carrying value, as determined by individual pool. As such, mortgage servicing rights are classified as nonrecurring Level 3. Real Estate Owned - Real estate owned is comprised of property acquired through foreclosure or voluntarily conveyed by borrowers. These assets are recorded on the date acquired at the lower of the related loan balance or fair value, less estimated disposition costs, with the fair value being determined by appraisal. Subsequently, foreclosed assets are valued at the lower of the amount recorded at acquisition date or fair value, less estimated disposition costs. We classify real estate owned as nonrecurring Level 3. The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at March 31, 2024 (in thousands): Fair value Valuation techniques Significant unobservable inputs Range (weighted average) Loans individually assessed $ 39,123 Appraisal value (1) Estimated cost to sell 10 % Mortgage servicing rights 173 Discounted cash flow Annual service cost $ 89 Prepayment rate 6.6 % to 18.2 % ( 10.7 %) Expected life (months) 51.0 to 102.3 ( 72.3 ) Option adjusted spread 729 basis points Forward yield curve 5.43 % to 5.33 % Real estate owned, net 50 Appraisal value (1) Estimated cost to sell 10 % Loans held for sale 7,869 Quoted prices for similar loans in active markets adjusted by an expected pull-through rate Estimated pull-through rate 100 % (1) Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral dependent. 32 Table of Contents (10) Derivative Financial Instruments We are a party to derivative financial instruments in the normal course of business to manage our own exposure to fluctuations in interest rates and to meet the needs of our customers. The primary derivatives that we use are interest rate swaps and caps and foreign exchange contracts, which are entered into with counterparties that meet established credit standards. We believe that the credit risk inherent in all of our derivative contracts is minimal based on our credit standards and the netting and collateral provisions of the interest rate swap agreements. Derivatives Designated as Hedging Instruments During the year-ended December 31, 2023, the Company entered into seven separate pay-fixed interest rate swaps in order to synthetically convert short-term three month FHLB advances to fixed-rate term funding with an aggregate value of $ 175 million with maturities ranging from three to five years . Our risk management objective and strategy for these interest rate swaps at such time was to reduce our exposure to variability in interest-related cash outflows attributable to changes in the USD-SOFR swap rate, the designated benchmark interest rate being hedged. Based upon our contemporaneous quantitative analysis at the inception of the interest rate swaps, we have determined these interest rate swaps qualify for hedge accounting in accordance with ASC 815, Derivatives and Hedging . Our cash flow hedges are recorded within other assets on the Consolidated Statement of Financial Condition at their estimated fair value. As long as the hedge remains highly effective, the changes in the fair value of derivatives designated, and that qualify, as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. A hedging relationship that is determined to not be highly effective no longer qualifies for hedge accounting and any gain or loss is recognized immediately into earnings. Amount reclassified into earnings are included in interest expense in the Consolidated Statement of Income. Derivatives Not Designated as Hedging Instruments We act as an interest rate or foreign exchange swap counterparty for certain commercial borrowers in the normal course of servicing our customers, which are accounted for at fair value. 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. We enter into interest rate lock commitments for residential mortgage loans which commit us to lend funds to a potential borrower at a specific interest rate within a specified period of time. Interest rate lock commitments that relate to the origination of mortgage loans that will be held-for-sale are considered derivative financial instruments under applicable accounting guidance. Interest rate lock commitments on loans held-for-sale are carried at fair value in other assets on the Consolidated Statement of Financial Condition. Northwest sells loans to the secondary market on a mandatory or best efforts basis. The loans sold on a mandatory basis commit us to deliver a specific principal amount of mortgage loans to an investor at a specified price, by a specified date, or the commitment must be paired off. These forward commitments entered into on a mandatory delivery basis meet the definition of a derivative financial instrument. All closed loans to be sold on a mandatory delivery basis are classified as held-for-sale on the Consolidated Statement of Financial Condition. Changes to the fair value of the interest rate lock commitments and the forward commitments are recorded in mortgage banking income in the Consolidated Statements of Income. We enter into risk participation agreements with financial institution counterparties for interest rate swaps related to loans in which we are a participant. 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. 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. 33 Table of Contents The following table presents information regarding our derivative financial instruments for the periods indicated (in thousands): Asset derivatives Liability derivatives Notional amount Fair value Notional amount Fair value At March 31, 2024 Derivatives designated as hedging instruments: Interest rate swap agreements $ 175,000 2,300 — — Derivatives not designated as hedging instruments: Interest rate swap agreements 740,173 45,188 740,173 45,220 Foreign exchange swap agreements 2,975 2 — — Interest rate lock commitments 18,591 479 — — Forward commitments 2,713 58 — — Risk participation agreements — — 92,281 17 Total Derivatives $ 939,452 48,027 832,454 45,237 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: Interest rate swap agreements 725,139 41,406 725,139 41,437 Foreign exchange swap agreements — — 12,278 291 Interest rate lock commitments 21,857 641 — — Forward commitments 281 12 — — Risk participation agreements — — 101,727 14 Total derivatives $ 822,277 42,772 939,144 42,940 The following table presents income or expense recognized on derivatives for the periods indicated (in thousands): For the quarter ended March 31, 2024 2023 Hedging derivatives: Decrease in interest expense $ 733 — Non-hedging swap derivatives: Increase/(decrease) in other income $ 287 ( 202 ) Decrease in mortgage banking income $ ( 115 ) ( 174 ) The following table presents information regarding our derivative financial instruments designated as hedging for the quarter ended March 31, 2024 (in thousands): Notional amount Effective rate Estimated decrease to interest expense in the next twelve months Maturity date Remaining term (in months) Interest rate products: Issued May 11, 2023 $ 25,000 3.50 % $ ( 546 ) 5/11/2027 37 Issued May 12, 2023 25,000 3.55 % ( 534 ) 5/12/2028 49 Issued May 19, 2023 25,000 3.83 % ( 460 ) 11/19/2027 44 Issued May 31, 2023 25,000 4.03 % ( 406 ) 11/30/2026 32 Issued July 26, 2023 25,000 4.22 % ( 359 ) 7/26/2028 52 Issued July 31, 2023 25,000 4.30 % ( 336 ) 1/31/2028 46 Issued August 9, 2023 25,000 4.32 % ( 339 ) 8/9/2027 40 Total $ 175,000 $ ( 2,980 ) 34 Table of Contents (11) Legal Proceedings We establish accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated. As of March 31, 2024, we do not anticipate that the aggregate ultimate liability arising out of any pending or threatened legal proceedings will be material to our Consolidated Financial Statements. Any such accruals are adjusted thereafter as appropriate to reflect changes in circumstances. Due to the inherent subjectivity of assessments and unpredictability of outcomes of legal proceedings, any amounts accrued may not represent the ultimate loss to us from legal proceedings. (12) Changes in Accumulated Other Comprehensive Income The following tables show the changes in accumulated other comprehensive income by component for the periods indicated (in thousands): For the quarter ended March 31, 2024 Unrealized losses on securities available-for-sale Change in fair value of interest rate swaps Change in defined benefit pension plans Total Balance as of December 31, 2023 $ ( 150,659 ) ( 374 ) 1,541 ( 149,492 ) Other comprehensive (loss)/income before reclassification adjustments (1) (2) ( 5,698 ) 2,154 — ( 3,544 ) Amounts reclassified from accumulated other comprehensive income (3) — — ( 388 ) ( 388 ) Net other comprehensive (loss)/income ( 5,698 ) 2,154 ( 388 ) ( 3,932 ) Balance as of March 31, 2024 $ ( 156,357 ) 1,780 1,153 ( 153,424 ) For the quarter ended March 31, 2023 Unrealized losses on securities available-for-sale Change in defined benefit pension plans Total Balance as of December 31, 2022 $ ( 164,206 ) ( 6,952 ) ( 171,158 ) Other comprehensive income before reclassification adjustments (4) 13,017 — 13,017 Amounts reclassified from accumulated other comprehensive income (5) — ( 382 ) ( 382 ) Net other comprehensive income/(loss) 13,017 ( 382 ) 12,635 Balance as of March 31, 2023 $ ( 151,189 ) ( 7,334 ) ( 158,523 ) (1) Consists of unrealized holding losses, net of tax of $ 1,758 . (2) Change in fair value of interest rate swaps, net of tax ($ 630 ). (3) Consists of realized gains, net of tax of $ 147 . (4) Consists of unrealized holding gains, net of tax of ($ 3,308 ). (5) Consists of realized gains, net of tax of $ 152 . (13) Subsequent Events In April 2024, the Company approved and announced its intention to pursue a limited, strategic repositioning of the securities portfolio to optimize its balance sheet by liquidating lower-yielding securities in an effort to generate additional future earnings. This initiative will be accomplished through the sale of up to 15 % of the Company’s available-for-sale investment securities portfolio. The securities losses recognized will be limited to $ 40 million, equivalent to approximately $ 30 million after tax. The Company expects a yield gain of 375 to 400 basis points from the repositioning and will attempt to manage the payback period so that it will be approximately three years . The characteristics of investment securities to be sold have an average yield less than 2.00 % with a remaining maturity of greater than four years . The proceeds will be used to reduce borrowings in the short term while also opportunistically reinvesting into securities with similar risk, maturity and duration characteristics. 35 Table of Contents Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-Looking Statements In addition to historical information, this document may contain certain forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, as they reflect management’s analysis only as of the date of this report. We have no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this report. Important factors that might cause such a difference include, but are not limited to: • inflation and changes in the interest rate environment that reduce our margins, our loan origination, or the fair value of financial instruments; • changes in asset quality, including increases in default rates on loans and higher levels of nonperforming loans and loan charge-offs generally; • changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; • changes in federal, state, or local tax laws and tax rates; • general economic conditions, either nationally or in our market areas, that are different than expected, including inflationary or recessionary pressures; • adverse changes in the securities and credit markets; • cyber-security concerns, including an interruption or breach in the security of our website or other information systems; • technological changes that may be more difficult or expensive than expected; • changes in liquidity, including the size and composition of our deposit portfolio, and the percentage of uninsured deposits in the portfolio; • the ability of third-party providers to perform their obligations to us; • competition among depository and other financial institutions, including with respect to deposit gathering, service charges and fees; • our ability to enter new markets successfully and capitalize on growth opportunities; • our ability to manage our internal growth and our ability to successfully integrate acquired entities, businesses or branch offices; • changes in consumer spending, borrowing and savings habits; • our ability to continue to increase and manage our commercial and personal loans; • possible impairments of securities held by us, including those issued by government entities and government sponsored enterprises; • changes in the value of our goodwill or other intangible assets; • the impact of the economy on our loan portfolio (including cash flow and collateral values), investment portfolio, customers and capital market activities; • our ability to receive regulatory approvals for proposed transactions or new lines of business; • the effects of any federal government shutdown or the inability of the federal government to manage debt limits; • changes in the financial performance and/or condition of our borrowers; • the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Securities and Exchange Commission, the Public Company Accounting Oversight Board, the Financial Accounting Standards Board (“FASB”) and other accounting standard setters; • changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; • our ability to access cost-effective funding; • the effect of global or national war, conflict, or terrorism; • our ability to manage market risk, credit risk and operational risk; • the disruption to local, regional, national and global economic activity caused by infectious disease outbreaks, and the significant impact that any such outbreaks may have on our growth, operations and earnings; • the effects of natural disasters and extreme weather events; • changes in our ability to continue to pay dividends, either at current rates or at all; • our ability to retain key employees; and • our compensation expense associated with equity allocated or awarded to our employees. 36 Table of Contents Overview of Critical Accounting Policies Involving Estimates Please refer to Note 1 of the Notes to Consolidated Financial Statements in Item 8 of Part II of our 2023 Annual Report on Form 10-K. Recently Issued Accounting Standards The following Accounting Standard Updates (“ASU”) issued by the Financial Accounting Standards Board ("FASB") have not yet been adopted. In October 2023, the FASB issued ASU No. 2023-06, "Disclosure Improvements." This ASU includes amendments on several subtopics in the FASB Accounting Standards Codification ("Codification") to incorporate certain disclosures and presentation requirements currently residing in SEC Regulations S-X and S-K. The adoption of this ASU may lead to certain disclosure being relocated into the financial statements. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. These amendments are to be applied prospectively. If the SEC has not removed the applicable requirements from Regulation S-X or Regulation S-K by June 30, 2027, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. We do not believe this guidance will have a material impact on the Company's financial statements. In December 2023, the FASB issued ASU No. 2023-09, "Improvements to Income Tax Disclosures." This ASU requires additional disaggregated disclosures on entity's effective tax rate reconciliation and additional details on income taxes paid. This guidance is effective for annual periods beginning after December 15, 2025, with early adoption permitted. This ASU is applied prospectively with the option to apply the ASU retrospectively. We do not believe this guidance will have a material impact on the Company's financial statements. Comparison of Financial Condition Total assets at March 31, 2024 were $14.5 billion, an increase of $91 million, or 1%, from $14.4 billion at December 31, 2023. This increase in assets was primarily driven by increases in loans receivable and marketable securities. A discussion of significant changes follows. Total marketable securities remained consistent at $1.9 billion at March 31, 2024, an increase of $37 million, or 2%, from December 31, 2023. Available-for-sale securities increased by $51 million, driven by securities purchases during the current period, while held-to-maturity securities decreased $14 million, driven by maturity and regular monthly cash flows. Gross loans receivable increased by $86 million, or 1%, to $11.5 billion at March 31, 2024, from $11.4 billion at December 31, 2023. This increase was attributable to organic loan growth. Our commercial banking portfolio increased by $170 million, or 4%, to $4.8 billion at March 31, 2024, from $4.6 billion at December 31, 2023, primarily as a result of the new commercial lending verticals that we implemented during the prior year. Specifically, our commercial and industrial (C&I) loan portfolio increased by $116 million, or 7%. The increase in our total commercial banking was partially offset by a decrease in our personal banking loan portfolio by $84 million, or 1%, to $6.7 billion at March 31, 2024 from $6.8 billion at December 31, 2023. Cash flows from our personal banking portfolio were redirected to partially fund commercial banking growth. 37 Table of Contents The following table provides the various loan sectors in our commercial real estate portfolio at March 31, 2024: Property type Percent of portfolio 5 or more unit dwelling 15.2 % Nursing home 12.8 Retail building 11.8 Commercial office building - non-owner occupied 9.1 Manufacturing & industrial building 5.0 Residential acquisition & development - 1-4 family, townhouses and apartments 4.3 Multi-use building - commercial, retail and residential 4.1 Warehouse/storage building 3.9 Multi-use building - office and warehouse 3.3 Commercial office building - owner occupied 3.3 Other medical facility 3.1 Single family dwelling 2.7 Student housing 2.2 Hotel/motel 2.1 Agricultural real estate 2.0 2-4 family 2.0 All other 13.1 Total 100.0 % The following table describes the collateral of our commercial real estate portfolio by state at March 31, 2024: State Percent of portfolio New York 33.0 % Pennsylvania 30.2 Ohio 20.3 Indiana 8.1 All other 8.4 Total 100.0 % Total deposits increased by $92 million, or 1%, to $12.1 billion at March 31, 2024 from $12.0 billion at December 31, 2023. This increase was driven by a $184 million, or 7%, increase in time deposits as we continued competitively positioning our deposit products, and a $51 million, or 2%, increase in savings deposits. Partially offsetting this increase was a decrease in demand deposit accounts by $127 million, or 2%, as customers shifted balances into higher yielding time deposit accounts. As of March 31, 2024, we had $449 million of brokered deposits, which made up 16% of our time deposits and 4.0% of our total deposit balance at year end. The balance carried an average all-in cost of 5.43% and an average original term of 12 months. These deposits were purchased through a registered broker, as part of an Asset/Liability Committee (“ALCO”) strategy to increase and diversify funding sources. In addition, at quarter end we had $527 million of deposits through our participation in the Intrafi Network Deposits and FIS Insured Deposit programs. These deposits are part of a reciprocal program that allows our depositors to receive expanded FDIC coverage by placing multiple interest-bearing demand accounts at other member banks and Northwest receives an equal amount of deposits from other member banks. The balance carried an average cost of 3.88%. At March 31, 2024 and December 31, 2023, we had total deposits in excess of $250,000 (the limit for FDIC insurance) of $1.8 billion. At those dates, we had no deposits that were uninsured for any other reason. The following table presents details regarding the Company's uninsured deposits portfolio: As of March 31, 2024 Balance Percent of total deposits Number of relationships Uninsured deposits per the Call Report (1) $2,806,650 23.25 % 4,965 Less intercompany deposit accounts 1,019,792 8.45 % 12 Less collateralized deposit accounts 408,083 3.38 % 255 Uninsured deposits excluding intercompany and collateralized accounts $1,378,775 11.42 % 4,698 (1) Uninsured deposits presented may be different from actual amounts due to titling of accounts. 38 Table of Contents Our largest uninsured depositor, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $19 million, or 0.16% of total deposits, as of March 31, 2024. Our top ten largest uninsured depositors, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $103 million, or 0.85% of total deposits, as of March 31, 2024. The average uninsured deposit account balance, excluding intercompany and collateralized accounts, was $293,000 as of March 31, 2024. Total shareholders’ equity remained steady at $1.6 billion, or $12.20 per share, at both March 31, 2024 and December 31, 2023, increasing by $1 million in the current quarter. This increase was the result of year-to-date earnings of $29 million, partially offset by $25 million of cash dividend payments for the quarter ended March 31, 2024, as well as a change in accumulated other comprehensive loss of $4 million, or 3%, primarily due to an increase in unrealized loss on our available-for-sale investment portfolio as a result of higher market interest rates. Regulatory Capital Financial institutions and their holding companies are subject to various regulatory capital requirements. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by the regulators that, if undertaken, could have a direct, material effect on a company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, financial institutions must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting guidelines. Capital amounts and classifications are also subject to qualitative judgments made by the regulators about components, risk-weighting and other factors. Applicable rules 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. Quantitative measures, established by regulation to ensure capital adequacy, require financial institutions to maintain minimum amounts and ratios (set forth in the table below) of Total, CET1 and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to average assets (as defined). Capital requirements are presented in the tables below (dollars in thousands). At March 31, 2024 Actual Minimum capital requirements (1) Well capitalized requirements Amount Ratio Amount Ratio Amount Ratio Total capital (to risk weighted assets) Northwest Bancshares, Inc. $ 1,805,374 15.951 % $ 1,188,406 10.500 % $ 1,131,815 10.000 % Northwest Bank 1,529,840 13.529 % 1,187,335 10.500 % 1,130,795 10.000 % Tier 1 capital (to risk weighted assets) Northwest Bancshares, Inc. 1,555,043 13.739 % 962,043 8.500 % 905,452 8.000 % Northwest Bank 1,393,786 12.326 % 961,176 8.500 % 904,636 8.000 % CET1 capital (to risk weighted assets) Northwest Bancshares, Inc. 1,429,393 12.629 % 792,270 7.000 % 735,680 6.500 % Northwest Bank 1,393,786 12.326 % 791,557 7.000 % 735,017 6.500 % Tier 1 capital (leverage) (to average assets) Northwest Bancshares, Inc. 1,555,043 10.828 % 574,453 4.000 % 718,066 5.000 % Northwest Bank 1,393,786 9.712 % 574,060 4.000 % 717,575 5.000 % (1) Amounts and ratios include the capital conservation buffer of 2.5%, which does not apply to Tier 1 capital to average assets (leverage ratio). 39 Table of Contents At December 31, 2023 Actual Minimum capital requirements (1) Well capitalized requirements Amount Ratio Amount Ratio Amount Ratio Total capital (to risk weighted assets) Northwest Bancshares, Inc. $ 1,799,883 16.040 % $ 1,178,234 10.500 % $ 1,122,128 10.000 % Northwest Bank 1,520,736 13.564 % 1,177,257 10.500 % 1,121,197 10.000 % Tier I capital (to risk weighted assets) Northwest Bancshares, Inc. 1,553,766 13.847 % 953,809 8.500 % 897,702 8.000 % Northwest Bank 1,388,808 12.387 % 953,018 8.500 % 896,958 8.000 % CET1 capital (to risk weighted assets) Northwest Bancshares, Inc. 1,428,181 12.727 % 785,489 7.000 % 729,383 6.500 % Northwest Bank 1,388,808 12.387 % 784,838 7.000 % 728,778 6.500 % Tier I capital (leverage) (to average assets) Northwest Bancshares, Inc. 1,553,766 10.841 % 573,290 4.000 % 716,612 5.000 % Northwest Bank 1,388,808 9.697 % 572,903 4.000 % 716,128 5.000 % (1) Amounts and ratios include the capital conservation buffer of 2.5%, which does not apply to Tier 1 capital to average assets (leverage ratio). Liquidity We are required to maintain a sufficient level of liquid assets, as determined by management and reviewed for adequacy by the FDIC and the Pennsylvania Department of Banking and Securities during their regular examinations. Northwest frequently monitors its liquidity position primarily using the ratio of unencumbered available-for-sale liquid assets as a percentage of deposits and borrowings (“liquidity ratio”). Northwest Bank’s liquidity ratio at March 31, 2024 was 9.77%. We adjust liquidity levels in order to meet funding needs for deposit outflows, payment of real estate taxes and insurance on mortgage loan escrow accounts, repayment of borrowings and loan commitments. At March 31, 2024, Northwest had $3.3 billion of additional borrowing capacity available with the FHLB, including $250 million on an overnight line of credit, which had a drawn balance of $56 million at March 31, 2024, as well as $264 million of borrowing capacity available with the Federal Reserve Bank and $105 million with two correspondent banks. Dividends We paid $25 million in cash dividends during the quarters ended March 31, 2024 and 2023. The common stock dividend payout ratio (dividends declared per share divided by net income per diluted share) for March 31, 2024 and 2023 was 87.0% and 76.9% on dividends of $0.20 per share. On April 17, 2024, the Board of Directors declared a cash dividend of $0.20 per share payable on May 15, 2024 to shareholders of record as of May 2, 2024. This represents the 118 th consecutive quarter we have paid a cash dividend. 40 Table of Contents Nonperforming Assets The following table sets forth information with respect to nonperforming assets. Nonaccrual loans are those loans on which the accrual of interest has ceased. Generally, when a loan is 90 days past due, we fully reverse all accrued interest thereon and cease to accrue interest thereafter. Exceptions are made for loans that have contractually matured, are in the process of being modified to extend the maturity date and are otherwise current as to principal and interest, and well-secured loans that are in the process of collection. Loans may also be placed on nonaccrual before they reach 90 days past due if conditions exist that call into question our ability to collect all contractual interest. Other nonperforming assets represent property acquired through foreclosure or repossession. Foreclosed property is carried at the lower of its fair value less estimated costs to sell or the principal balance of the related loan. March 31, 2024 December 31, 2023 (in thousands) Loans 90 days or more past due: Residential mortgage loans $ 5,813 7,995 Home equity loans 2,823 3,126 Vehicle loans 2,496 3,051 Other consumer loans 849 927 Commercial real estate loans 6,041 6,535 Commercial real estate - owner occupied 890 177 Commercial loans 3,421 2,780 Total loans 90 days or more past due $ 22,333 24,591 Total real estate owned (REO) $ 50 104 Total loans 90 days or more past due and REO 22,383 24,695 Total loans 90 days or more past due to net loans receivable 0.20 % 0.22 % Total loans 90 days or more past due and REO to total assets 0.15 % 0.17 % Nonperforming assets: Nonaccrual loans - loans 90 days or more past due 19,881 21,894 Nonaccrual loans - loans less than 90 days past due 75,179 72,490 Loans 90 days or more past due still accruing 2,452 2,698 Total nonperforming loans 97,512 97,082 Total nonperforming assets $ 97,562 97,186 Total nonaccrual loans to total loans 0.83 % 0.83 % Allowance for Credit Losses On an ongoing basis, the Credit Administration department, as well as loan officers and department heads, review and monitor the loan portfolio for problem loans. This portfolio monitoring includes a review of the monthly delinquency reports as well as historical comparisons and trend analysis. Personal and small business commercial loans are classified primarily by delinquency status. In addition, a meeting is held every quarter with each vertical to monitor the performance and status of commercial loans on an internal watch list. On an on-going basis, the loan officer, in conjunction with a portfolio manager, grades or classifies problem commercial loans or potential problem commercial loans based upon their knowledge of the lending relationship and other information previously accumulated. This rating is also reviewed independently by our Loan Review department on a periodic basis. Our loan grading system for problem commercial loans is consistent with industry regulatory guidelines which classifies loans as “substandard”, “doubtful” or “loss”. Loans that do not expose us to risk sufficient to warrant classification in one of the previous categories, but which possess some weaknesses, are designated as “special mention”. A “substandard” loan is any loan that is 90 days or more contractually delinquent or is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as “doubtful” have all the weaknesses inherent in those classified as “substandard” with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions or values, highly questionable and improbable. Loans classified as “loss” have all the weakness inherent in those classified as “doubtful” and are considered uncollectible. Credit relationships that have been classified as substandard or doubtful and are greater than or equal to $1.0 million are reviewed by the Credit Administration department to determine if they no longer continue to demonstrate similar risk characteristics to their loan pool. If a loan no longer demonstrates similar risk characteristics to their loan pool they are removed from the pool and an individual assessment will be performed. If it is determined that a loan needs to be individually assessed, the Credit Administration department determines the proper measure of fair value for each loan based on one of three methods: (1) the present value of expected future cash flows discounted at 41 Table of Contents the loan’s effective interest rate; (2) the loan’s observable market price; or (3) the fair value of the collateral if the loan is collateral dependent, less costs of sale or disposal. If the measurement of the fair value of the loan is more or less than the amortized cost basis of the loan, the Credit Administration department adjusts the specific allowance associated with that individual loan accordingly. If a substandard or doubtful loan is not individually assessed, it is grouped with other loans that possess common characteristics for credit losses and analysis. For the purpose of calculating reserves, we have grouped our loans into seven segments: residential mortgage loans, home equity loans, vehicle loans, consumer loans, commercial real estate loans, commercial real estate loans - owner occupied and commercial loans. The allowance for credit losses is measured using a combination of statistical models and qualitative assessments. We use a twenty four month forecasting period and revert to historical average loss rates thereafter. Reversion to average loss rates takes place over twelve months. Historical average loss rates are calculated using historical data beginning in October 2009 through the current period. The credit losses for individually assessed loans along with the estimated loss for each homogeneous pool are consolidated into one summary document. This summary schedule along with the support documentation used to establish this schedule is presented to management’s Allowance for Credit Losses Committee (“ACL Committee”) monthly. The ACL Committee reviews and approves the processes and ACL documentation presented. Based on this review and discussion, the appropriate amount of ACL is estimated and any adjustments to reconcile the actual ACL with this estimate are determined. The ACL Committee also considers if any changes to the methodology are needed. In addition to the ACL Committee’s review and approval, a review is performed by the Risk Management Committee of the Board of Directors on a quarterly basis and annually by internal audit. In addition to the reviews by management’s ACL Committee and the Board of Directors’ Risk Management Committee, regulators from either the FDIC and/or the Pennsylvania Department of Banking and Securities perform an extensive review on at least an annual basis for the adequacy of the ACL and its conformity with regulatory guidelines and pronouncements. Any recommendations or enhancements from these independent parties are considered by management and the ACL Committee and implemented accordingly. We acknowledge that this is a dynamic process and consists of factors, many of which are external and out of our control that can change frequently, rapidly and substantially. The adequacy of the ACL is based upon estimates using all the information previously discussed as well as current and known circumstances and events. There is no assurance that actual portfolio losses will not be substantially different than those that were estimated. We utilize a structured methodology each period when analyzing the adequacy of the allowance for credit losses and the related provision for credit losses, which the ACL Committee assesses regularly for appropriateness. As part of the analysis as of March 31, 2024, we considered the most recent economic conditions and forecasts available which incorporated the impact of material recent economic events. In addition, we considered the overall trends in asset quality, reserves on individually assessed loans, historical loss rates and collateral valuations. The ACL decreased by $346,000 to $125 million, or 1.09% of total loans at March 31, 2024 from $125 million, or 1.10% of total loans, at December 31, 2023. This decrease was primarily attributable to changes within our personal banking loan portfolio driven by improvements in economic forecasts, which was offset by growth within our commercial loan portfolio during the year. Total classified loans remain low with a slight increase to $229 million at March 31, 2024 from $218 million at December 31, 2023. This increase was primarily within our commercial portfolio. We also consider how the levels of nonaccrual loans and historical charge-offs have influenced the required amount of allowance for credit losses. Nonaccrual loans of $95 million at March 31, 2024, remained steady, increasing by $1 million, or 1%, from $94 million at December 31, 2023, or 0.83% of total loans receivable as of both period ends. As a percentage of average loans, annualized net charge-offs increased slightly to 0.16% for the quarter ended March 31, 2024 compared to 0.11% for the year ended December 31, 2023. 42 Table of Contents Comparison of Operating Results for the Quarters Ended March 31, 2024 and 2023 Net income for the quarter ended March 31, 2024 was $29 million, or $0.23 per diluted share, a decrease of $5 million, or 13%, from net income of $34 million, or $0.26 per diluted share, for the quarter ended March 31, 2023. The decrease in net income resulted primarily from a decrease in net interest income, partially offset by an increase in noninterest income. Net interest income decreased by $9 million, or 8%, and noninterest income increased $4 million, or 17%. Net income for the quarter ended March 31, 2024 represents annualized returns on average equity and average assets of 7.57% and 0.81%, respectively, compared to 9.11% and 0.97% for the same quarter last year. A further discussion of notable changes follows. To make it easier to compare both the results across several periods and the yields on various types of earning assets (some taxable, some not), we present net interest income in the discussion below on a fully taxable equivalent “FTE basis” (i.e., as if all income were taxable and at the same rate). For example, $100 of tax-exempt income would be presented as $126, an amount that, if taxed at the statutory federal income tax rate of 21%, would yield $100. See the "Average Balance Sheet" for information regarding tax-equivalent adjustments and GAAP results. Net Interest Income Net interest income (FTE) was $104 million for the quarter ended March 31, 2024 and net interest margin was 3.10%. Compared to the same quarter of the prior year, net interest income (FTE) decreased $9 million and net interest margin decreased by 36 basis points. The decrease in net interest income (FTE) and the net interest margin reflects higher interest-bearing deposit costs and a shift in funding mix to higher cost deposits and borrowings due to the higher interest rate environment. Partly offsetting the decline in net interest income and the net interest margin were higher earning asset balances and yields. 43 Table of Contents Average loans receivable increased 4% from the quarter ended March 31, 2023 driven by commercial loans, which grew by $553 million, as we have continued to build-out our commercial lending verticals. Interest income on loans receivable increased by $26 million, or 21%, from the same quarter in prior year as the result of increases in both the average yield and the average balance on loans receivable. The average yield on loans receivable increased to 5.33% for the quarter ended March 31, 2024 due to the elevated market interest rates as well as a change in mix to higher yield loan products. Average investments declined 11% from the first quarter of 2023 driven by the sale of investment securities during the prior year coupled with principal payments and maturities. Interest income on investment securities decreased by $1 million, or 8%, from the quarter ended March 31, 2023. Average deposits grew 4% from the quarter ended March 31, 2023 driven by a $1.4 billion increase in our average time deposits due to customer preferences for this fixed maturity product type. This increase was partially offset by a decrease in money market balances as customers shifted balances into higher yielding time deposit accounts. Interest expense on deposits increased by $36 million primarily attributable to increases in the interest rates paid on deposit accounts as we continued competitively positioning our deposit products, as well as a change in mix to higher cost products. Compared to the quarter ended March 31, 2023, average borrowings saw a 37% reduction, primarily attributable to the strategic pay-down of wholesale borrowings. This decrease was made possible by a substantial increase in cash reserves, resulting from a notable rise in the average balance of deposits, which also decreased interest expense on borrowings by $2 million. 44 Table of Contents Average Balance Sheet (in thousands) The following table sets forth certain information relating to the Company’s average balance sheet and reflects the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages. Quarter ended March 31, 2024 2023 Average balance Interest Avg. yield/ cost (h) Average balance Interest Avg. yield/ cost (h) Assets Interest-earning assets: Residential mortgage loans $ 3,392,524 32,674 3.85 % $ 3,493,617 32,009 3.66 % Home equity loans 1,205,273 17,294 5.77 % 1,284,425 16,134 5.09 % Consumer loans 2,033,620 25,033 4.95 % 2,123,672 20,794 3.97 % Commercial real estate loans 2,999,224 43,425 5.73 % 2,824,120 37,031 5.24 % Commercial loans 1,714,667 31,857 7.35 % 1,161,298 18,353 6.32 % Loans receivable (a) (b) (d) (includes FTE adjustments of $712 and $576, respectively) 11,345,308 150,283 5.33 % 10,887,132 124,321 4.63 % Mortgage-backed securities (c) 1,717,306 7,944 1.85 % 1,909,676 8,537 1.79 % Investment securities (c) (d) (includes FTE adjustments of $145 and $216, respectively) 333,752 1,430 1.71 % 384,717 1,761 1.83 % FHLB stock, at cost 32,249 607 7.57 % 39,631 690 7.06 % Other interest-earning deposits 61,666 832 5.34 % 38,324 423 4.41 % Total interest-earning assets (includes FTE adjustments of $857 and $792, respectively) 13,490,281 161,096 4.80 % 13,259,480 135,732 4.15 % Noninterest-earning assets (e) 918,331 862,016 Total assets $ 14,408,612 $ 14,121,496 Liabilities and shareholders’ equity Interest-bearing liabilities: Savings deposits (g) $ 2,122,035 5,036 0.95 % $ 2,198,988 690 0.13 % Interest-bearing demand deposits (g) 2,538,823 5,402 0.86 % 2,612,883 951 0.15 % Money market deposit accounts (g) 1,961,332 7,913 1.62 % 2,408,582 4,403 0.74 % Time deposits (g) 2,697,983 29,335 4.37 % 1,293,609 5,194 1.63 % Borrowed funds (f) 469,697 5,708 4.89 % 740,218 7,938 4.35 % Subordinated debentures 114,225 1,148 4.02 % 113,870 1,148 4.03 % Junior subordinated debentures 129,597 2,459 7.51 % 129,335 2,152 6.66 % Total interest-bearing liabilities 10,033,692 57,001 2.28 % 9,497,485 22,476 0.96 % Noninterest-bearing demand deposits (g) 2,567,781 2,889,973 Noninterest-bearing liabilities 257,269 235,213 Total liabilities 12,858,742 12,622,671 Shareholders’ equity 1,549,870 1,498,825 Total liabilities and shareholders’ equity $ 14,408,612 $ 14,121,496 Net interest income/Interest rate spread 104,095 2.52 % 113,256 3.19 % Net interest-earning assets/Net interest margin $ 3,456,589 3.10 % $ 3,761,995 3.46 % Ratio of interest-earning assets to interest- bearing liabilities 1.34X 1.40X (a) Average gross loans includes loans held as available-for-sale and loans placed on nonaccrual status. (b) Interest income includes accretion/amortization of deferred loan fees/expenses, which were not material. (c) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale. (d) Interest income on tax-free investment securities and tax-free loans are presented on a FTE basis. (e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale. (f) Average balances include FHLB borrowings and collateralized borrowings. (g) Average cost of deposits were 1.61% and 0.40%, respectively, average cost of interest-bearing deposits were 2.06% and 0.54%, respectively . (h) Annualized. Shown on a FTE basis. The FTE basis adjusts for the tax benefit of income on certain tax exempt loans and investments using the federal statutory rate applicable to each period presented. We believe this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts. GAAP basis yields were: loans — 5.30% and 4.61%, respectively; investment securities — 1.54% and 1.61%, respectively; interest-earning assets — 4.78% and 4.13%, respectively. GAAP basis net interest rate spreads were 2.49% and 3.17%, respectively; and GAAP basis net interest margins were 3.08% and 3.44%, respectively. 45 Table of Contents Rate/Volume Analysis (in thousands) The following table represents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected interest income and interest expense during the periods indicated. Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) net change. Changes that cannot be attributed to either rate or volume have been allocated to both rate and volume. For the quarter ended March 31, 2024 vs. 2023 Increase/(decrease) due to Total increase/(decrease) Rate Volume Interest-earning assets: Loans receivable $ 19,893 6,069 25,962 Mortgage-backed securities 296 (889) (593) Investment securities (112) (219) (331) FHLB stock, at cost 56 (139) (83) Other interest-earning deposits 95 314 409 Total interest-earning assets 20,228 5,136 25,364 Interest-bearing liabilities: Savings deposits 4,529 (183) 4,346 Interest-bearing demand deposits 4,609 (158) 4,451 Money market deposit accounts 5,314 (1,804) 3,510 Time deposits 8,871 15,270 24,141 Borrowed funds 1,057 (3,287) (2,230) Subordinated debt (4) 4 — Junior subordinated debentures 302 5 307 Total interest-bearing liabilities 24,678 9,847 34,525 Net change in net interest income $ (4,450) (4,711) (9,161) Provision for Credit Losses 1Q23 2Q23 3Q23 4Q23 1Q24 Provision for credit losses - loans (in thousands) $4,870 6,010 3,983 3,801 4,234 Provision for credit losses - unfunded commitments (in thousands) 126 2,920 (2,981) 4,145 (799) Annualized net charge-offs to average loans 0.08 % 0.10 % 0.13 % 0.12 % 0.16 % The provision for credit losses decreased by $2 million, or 31%, from the quarter ended March 31, 2023. This decrease included a $1 million decrease in the provision for credit losses - loans driven by changes in the economic forecasts reflected in our allowance for credit loss models, as well as a $1 million decrease in the provision for credit losses - unfunded commitments driven by the timing of origination and funding of commercial construction loans and lines of credit. Classified assets continue to remain low at $229 million, at March 31, 2024 from $209 million at March 31, 2023, or 2% of total loans as of both periods. In determining the amount of the current period provision, we considered current and forecasted economic conditions, including but not limited to improvements in unemployment levels, expected economic growth, bankruptcy filings, and changes in real estate values and the impact of these factors on the quality of our loan portfolio and historical loss experience. We analyze the allowance for credit losses as described in the section entitled “ Allowance for Credit Losses. ” The provision that is recorded is sufficient, in our judgment, to bring this reserve to a level that reflects the current expected lifetime losses in our loan portfolio relative to loan mix, a reasonable and supportable economic forecast period and historical loss experience at March 31, 2024. 46 Table of Contents Noninterest Income (a) Other noninterest income includes the gain on sale of SBA loans, net gain on real estate owned, mortgage banking income, and other operating income. See the "Consolidated Statements of Income" in Item 1. Financial Statements of this report. Noninterest income increased by $4 million, or 17%, from the quarter ended March 31, 2023. This increase was primarily due to a $2 million, or 18%, increase in service charges and fees to $16 million for the quarter ended March 31, 2024 from $13 million for the quarter ended March 31, 2023 driven by commercial loan fees and deposit related fees based on customer activity in the current quarter as well as gain on sale of SBA loans and improvements in trust and other financial services income. Noninterest Expense (a) Other noninterest expense includes office operations, collections expense, marketing expense, FDIC insurance expense, amortization of intangible assets, real estate owned expense, merger, asset disposition and restructuring expense, and other expenses. See the "Consolidated Statements of Income" in Item 1. Financial Statements of this report. Noninterest expense increased by $3 million, or 3%, from the quarter ended March 31, 2023. This increase was primarily attributable to an increase in c ompensation and employee benefits expense of $5 million, or 11%, to $52 million for the quarter ended March 31, 2024, from $47 million for the quarter ended March 31, 2023 driven primarily by the build out of the commercial business and related credit, risk management, and internal audit support functions. Partially offsetting this increase was a decrease in non-personnel expense related to a decline in merger, asset disposition and restructuring expense of $2 million, or 66%, as a result of the severance and fixed asset charges related to the branch optimization and personnel reduction incurred during the first quarter of the prior year. Income Taxes The provision for income taxes decreased by $1.7 million, or 17%, to $8.6 million for the quarter ended March 31, 2024 from $10.3 million for the quarter ended March 31, 2023. This decrease in income taxes was due primarily to a decrease in our income before taxes in the current year. We anticipate our effective tax rate to be between 22.0% and 24.0% for the year ending December 31, 2024. 47 Table of Contents Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As the holding company for a savings bank, one of our primary market risks is interest rate risk. Interest rate risk is the sensitivity of net interest income to variations in interest rates over a specified time period. The sensitivity results from differences in the time periods in which interest rate sensitive assets and liabilities mature or re-price. We attempt to control interest rate risk by matching, within acceptable limits, the re-pricing periods of assets and liabilities. We have attempted to limit our exposure to interest sensitivity by increasing core deposits, enticing customers to extend certificates of deposit maturities, borrowing funds with fixed-rates and longer maturities and by shortening the maturities of our assets by emphasizing the origination of more short-term fixed rate loans and adjustable rate loans. We also have the ability to sell a portion of the long-term, fixed-rate mortgage loans that we originate. In addition, we purchase shorter term or adjustable-rate investment securities and mortgage-backed securities. We have an Asset/Liability Committee consisting of members of management which meets monthly to review market interest rates, economic conditions, the pricing of interest-earning assets and interest-bearing liabilities and the balance sheet structure. On a quarterly basis, this Committee also reviews the interest rate risk position and cash flow projections. The Board of Directors has a Risk Management Committee which meets quarterly and reviews interest rate risk and trends, our interest sensitivity position, the liquidity position and the market risk inherent in the investment portfolio. In an effort to assess interest rate risk and market risk, we utilize a simulation model to determine the effect of immediate incremental increases and decreases in interest rates on net income and the market value of equity. Certain assumptions are made regarding loan prepayments and decay rates of savings and interest-bearing demand accounts. Because it is difficult to accurately project the market reaction of depositors and borrowers, the effect of actual changes in interest rates on these assumptions may differ from simulated results. We have established the following guidelines for assessing interest rate risk: Net interest income simulation . Given a parallel shift of 100 basis points (“bps”), 200 bps and 300 bps in interest rates, the estimated net income may not decrease by more than 5%, 10% and 15%, respectively, within a one-year period. Net income simulation . Given a parallel shift of 100 bps, 200 bps and 300 bps in interest rates, the estimated net income may not decrease by more than 10%, 20% and 30%, respectively, within a one-year period. Market value of equity simulation . The market value of equity is the present value of assets and liabilities. Given a parallel shift of 100 bps, 200 bps and 300 bps in interest rates, the market value of equity may not decrease by more than 15%, 30% and 35%, respectively, from the computed economic value at current interest rate levels. The following table illustrates the simulated impact of a 100 bps, 200 bps or 300 bps upward or a 100 bps, 200 bps or 300 bps downward movement in interest rates on net income, return on average equity, earnings per share and market value of equity. This analysis was prepared assuming that interest-earning asset and interest-bearing liability levels at March 31, 2024 remain constant. The impact of the rate movements was computed by simulating the effect of an immediate and sustained shift in interest rates over a twelve-month period from March 31, 2024 levels. Increase Decrease Parallel shift in interest rates over the next 12 months 100 bps 200 bps 300 bps 100 bps 200 bps 300 bps Projected percentage increase/(decrease) in net interest income (1.7) % (3.7) % (5.7) % (1.4 %) (6.2 %) (11.6 %) Projected percentage increase/(decrease) in net income (4.0) % (8.9) % (13.8) % (3.4 %) (15.1 %) (28.4 %) Projected increase/(decrease) in return on average equity (3.9) % (8.5) % (13.3) % (3.2 %) (14.5 %) (27.4 %) Projected increase/(decrease) in earnings per share $ (0.05) $ (0.10) $ (0.15) $ (0.04) $ (0.17) $ (0.31) Projected percentage increase/(decrease) in market value of equity (8.1 %) (16.5 %) (24.5 %) 6.6 % 8.7 % 8.1 % The figures included in the table above represent projections that were computed based upon certain assumptions including prepayment rates and decay rates. These assumptions are inherently uncertain and, as a result, cannot precisely predict the impact of changes in interest rates. Actual results may differ significantly due to timing, magnitude and frequency of interest rate changes and changes in market conditions, and actions that may be taken by management in response to interest rate changes. 48 Table of Contents Item 4. CONTROLS AND PROCEDURES Under the supervision of and with the participation of management, including the Principal Executive Officer and Principal Financial Officer, we evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of the Evaluation Date, these disclosure controls and procedures were effective. There were no changes in the internal controls over financial reporting during the period covered by this report or in other factors that have materially affected, or are reasonably likely to materially affect the internal controls over financial reporting. PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS We are subject to a number of asserted and unasserted claims encountered in the normal course of business. We believe that any additional liability, other than that which has already been accrued, that may result from such potential litigation will not have a material adverse effect on the financial statements. However, we cannot presently determine whether or not any claims against us will have a material adverse effect on our results of operations in any future reporting period. Refer to Note 11. Item 1A. RISK FACTORS Except as previously disclosed, there have been no material updates or additions to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission. Additional risks not presently known to us, or that we currently deem immaterial, may also adversely affect our business, financial condition or results of operations. 49 Table of Contents Item 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES a) Not applicable. b) Not applicable. c) On December 13, 2012, the Board of Directors approved a program that authorizes the repurchase of approximately 5,000,000 shares of common stock. This program does not have an expiration date. During the quarter ended March 31, 2024, there were no shares of common stock repurchased and there are a maximum of 2,261,130 remaining shares that can be purchased under the current repurchase program. Item 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. Item 4. MINE SAFETY DISCLOSURES Not applicable. Item 5. OTHER INFORMATION During the three months ended March 31, 2024, no directors or executive officers of the Company adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) and/or any “Rule 10b5-1 trading arrangement.” 50 Table of Contents Item 6. EXHIBITS 10.1 Employment Agreement by and between Northwest Bank, Northwest Bancshares, Inc. and Douglas M. Schosser 31.1 Certification of the Chief Executive Officer pursuant to Rule 13a-15 or 15d-15 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of the Chief Financial Officer pursuant to Rule 13a-15 or 15d-15 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document. 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB XBRL Taxonomy Extension Label Linkbase. 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. 104 The cover page of this Quarterly Report on Form 10-Q, formatted in inline XBRL. 51 Table of Contents Signature Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed by the undersigned thereunto duly authorized. NORTHWEST BANCSHARES, INC. (Registrant) Date: May 3, 2024 By: /s/ Louis J. Torchio Louis J. Torchio President and Chief Executive Officer (Duly Authorized Officer) Date: May 3, 2024 By: /s/ Jeffrey J. Maddigan Jeffrey J. Maddigan Executive Vice President, Finance, Accounting and Corporate Treasurer (Principal Accounting Officer) 52