What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-03 compared with 2023-11-03 · 173 added, 413 removed, 1054 unchanged (36% of the section changed)

4 unchanged sentences

(in thousands, except share data)

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Cash and cash equivalents $ 119,319 122,260

46 unchanged sentences

(in thousands, except share data)

Quarter ended September 30, Nine months ended September 30,

2023 2022 2023 2022

Quarter ended March 31,

Interest income:

19 unchanged sentences

Noninterest income:

Loss on sale of investments — ( 2 ) ( 8,306 ) ( 7 )

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

Gain on sale of SBA loans 873 279

32 unchanged sentences

(in thousands)

Quarter ended September 30, Nine months ended September 30,

2023 2022 2023 2022

Quarter ended March 31,

Net income $ 29,163 33,679

Other comprehensive loss net of tax:

Other comprehensive (loss)/income net of tax:

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

Unrealized holding losses, net of tax of $ 9,140 , $ 14,705 , $ 9,603 and $ 45,555 , respectively

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

— — 5,636 ( 2 )

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

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

1,825 — 3,562 —

Defined benefit plan:

1 unchanged sentence

( 388 ) ( 382 )

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

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

Other comprehensive (loss)/income ( 3,932 ) 12,635

Total comprehensive income $ 25,231 46,314

See accompanying notes to unaudited Consolidated Financial Statements.

5 unchanged sentences

other comprehensive loss Total shareholders’ equity

Quarter ended September 30, 2023 Shares Amount

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

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:

8 unchanged sentences

— — — ( 25,422 ) — ( 25,422 )

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

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

Quarter ended September 30, 2022 Shares Amount

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

Comprehensive income:

Net income — — — 37,304 — 37,304

Other comprehensive loss, net of tax of $ 14,755

— — — — ( 48,518 ) ( 48,518 )

Total comprehensive income/(loss) — — — 37,304 ( 48,518 ) ( 11,214 )

Exercise of stock options 73,472 — 897 — — 897

Stock-based compensation expense — — 944 — — 944

Stock-based compensation forfeited ( 33,249 ) — ( 1 ) — — ( 1 )

Dividends paid ($ 0.20 per share)

— — — ( 25,379 ) — ( 25,379 )

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

See accompanying notes to unaudited Consolidated Financial Statements.

NORTHWEST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

(in thousands, expect share data)

Additional paid-in capital Retained earnings Accumulated

other comprehensive income/(loss) Total shareholders’ equity

Nine months ended September 30, 2023 Shares Amount

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

1 unchanged sentence

Net income — — — 33,679 — 33,679

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

Other comprehensive income, net of tax of ($ 3,157 )

— — — — 12,635 12,635

7 unchanged sentences

— — — ( 25,405 ) — ( 25,405 )

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

Additional paid-in capital Retained earnings Accumulated

other comprehensive income/(loss) Total shareholders’ equity

Nine months ended September 30, 2022 Shares Amount

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

Comprehensive income:

Net income — — — 99,017 — 99,017

Other comprehensive loss, net of tax of $ 45,706

— — — — ( 153,519 ) ( 153,519 )

Total comprehensive income/(loss) — — — 99,017 ( 153,519 ) ( 54,502 )

Exercise of stock options 314,880 2 3,719 — — 3,721

Stock-based compensation expense 75,377 2 3,065 — — 3,067

Stock-based compensation forfeited ( 80,451 ) ( 1 ) — — — ( 1 )

Dividends paid ($ 0.60 per share)

— — — ( 76,070 ) — ( 76,070 )

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

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.

3 unchanged sentences

(in thousands)

Nine months ended September 30,

Quarter ended March 31,

Operating activities:

Net income $ 29,163 33,679

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

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

Provision for credit losses 3,435 4,996

Loss on sale of investments 8,306 —

Net loss/(gain) on sale of assets 743 ( 858 )

Net (gain)/loss on sale of assets ( 6,023 ) 1,254

Mortgage banking activity ( 794 ) ( 179 )

Gain on sale of SBA loans ( 852 ) —

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

Net depreciation, amortization and accretion 4,646 2,154

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

Increase in other liabilities 15,617 11,270

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 real estate owned 37 44

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

Noncash write-down of other assets 5,929 37

Origination of loans held-for-sale ( 43,052 ) ( 30,712 )

2 unchanged sentences

Investing activities:

Purchase of marketable securities held-to-maturity — ( 212,892 )

Purchase of marketable securities available-for-sale ( 79,052 ) —

1 unchanged sentence

Proceeds from maturities and principal reductions of marketable securities available-for-sale 20,501 28,246

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

Proceeds from bank-owned life insurance — 1,633

Loan originations ( 1,055,402 ) ( 923,686 )

Proceeds from sale of mortgage servicing rights 13,118 —

Loan purchases — ( 371,121 )

Proceeds from loan maturities and principal reductions 962,835 748,472

1 unchanged sentence

Proceeds from sale of real estate owned 114 186

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

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

(Purchases)/disposals of premises and equipment, net ( 5,471 ) 1,340

Net cash used in investing activities ( 143,587 ) ( 130,157 )

Nine months ended September 30,

Financing activities:

Net increase/(decrease) in deposits 325,334 ( 422,773 )

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

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

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

1 unchanged sentence

Proceeds from stock options exercised 20 465

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

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

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

Net decrease in cash and cash equivalents ( 2,941 ) ( 42,868 )

Cash and cash equivalents at end of period $ 119,319 96,497

5 unchanged sentences

Loan foreclosures and repossessions $ 1,148 847

Sale of real estate owned financed by the Company 70 175

See accompanying notes to unaudited Consolidated Financial Statements.

6 unchanged sentences

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 MutualFirst 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.

3 unchanged sentences

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

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

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

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

Stock-Based Compensation

On March 15, 2023, the Company awarded employees 176,623 restricted stock units (“RSUs”) with a weighted average discounted grant date fair value of $ 11.28 .

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

The Company awarded directors 33,048 restricted stock awards (“RSAs”) with a grant date fair value of $ 12.80 which fully vest one-year from the grant date.

Also, the Company awarded employees 176,623 performance share units (“PSUs”) with a discounted grant date fair value of $ 10.54 .

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

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

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

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

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

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

Income Taxes-Uncertain Tax Positions

Accounting standards prescribe a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return.

A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable, based on its technical merits.

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

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

We recognize interest accrued related to:

(1) unrecognized tax benefits in other expenses and (2) refund claims in other operating income.

We recognize penalties (if any) in other expenses.

We are subject to audit by the Internal Revenue Service and any state in which we conduct business for the tax periods ended December 31, 2022, 2021, 2020 and 2019.

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.

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

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

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

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

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

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

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

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

January 1, 2023).

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

In March 2020, the FASB issued ASU No.

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

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

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

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

In December 2022, the FASB issued ASU No.

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

Deferral of the Sunset Date to Topic 848”.

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

In January 2021, the FASB issued ASU No.

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

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

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

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

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

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.

(2) Marketable Securities

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

The following table shows the portfolio of marketable securities available-for-sale at March 31, 2024 (in thousands):

Debt issued by the U.S government and agencies:

26 unchanged sentences

Municipal securities:

Due within one year 506 — ( 1 ) 505

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

10 unchanged sentences

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

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

The following table shows the portfolio of marketable securities held-to-maturity at March 31, 2024 (in thousands):

Debt issued by government-sponsored enterprises:

19 unchanged sentences

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 September 30, 2023 (in thousands):

The following table shows the contractual maturity of our residential mortgage-backed securities available-for-sale at March 31, 2024 (in thousands):

Residential mortgage-backed securities:

4 unchanged sentences

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 September 30, 2023 (in thousands):

The following table shows the contractual maturity of our residential mortgage-backed securities held-to-maturity at March 31, 2024 (in thousands):

Residential mortgage-backed securities:

Due in less than one year $ 38 38

Due after one year through five years 20,144 17,635

2 unchanged sentences

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 September 30, 2023 (in thousands):

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

17 unchanged sentences

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 September 30, 2023, which were comprised of 548 individual securities, represents a credit loss impairment.

The Company does not believe that the available-for-sale debt securities that were in an unrealized loss position as of March 31, 2024, which were comprised of 497 individual securities, represents a credit loss impairment.

All of these securities were issued by U.S.

7 unchanged sentences

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

The 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.

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.

3 unchanged sentences

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

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

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

The 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 September 30, 2023.

All of our held-to-maturity securities were current in their payment of principal and interest as of March 31, 2024.

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

4 unchanged sentences

(3) Loans Receivable

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

September 30, 2023 December 31, 2022

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

15 unchanged sentences

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

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

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

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

The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the quarter ended September 30, 2023 (in thousands):

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

Allowance for Credit Losses

Personal Banking:

Residential mortgage loans $ 17,090 ( 370 ) ( 171 ) 75 17,556

Home equity loans 5,044 201 ( 320 ) 161 5,002

Vehicle loans 27,226 984 ( 1,524 ) 483 27,283

Consumer loans 1,202 1,436 ( 1,561 ) 317 1,010

Total Personal Banking 50,562 2,251 ( 3,576 ) 1,036 50,851

Commercial Banking:

Commercial real estate loans 48,582 ( 1,110 ) ( 484 ) 120 50,056

Commercial real estate loans - owner occupied 3,479 ( 30 ) — 11 3,498

Commercial loans 22,218 2,872 ( 1,286 ) 614 20,018

Total Commercial Banking 74,279 1,732 ( 1,770 ) 745 73,572

Total $ 124,841 3,983 ( 5,346 ) 1,781 124,423

Allowance for Credit Losses - off-balance sheet exposure

Personal Banking:

Residential mortgage loans $ 3 ( 1 ) — — 4

Home equity loans 67 3 — — 64

Total Personal Banking 70 2 — — 68

Commercial Banking:

Commercial real estate loans 4,797 ( 2,858 ) — — 7,655

Commercial real estate loans - owner occupied 140 ( 180 ) — — 320

Commercial loans 7,971 55 — — 7,916

Total Commercial Banking 12,908 ( 2,983 ) — — 15,891

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

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

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

(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.

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

22 unchanged sentences

Total off-balance sheet exposure $ 16,324 ( 799 ) — — 17,123

The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the nine months ended September 30, 2023 (in thousands):

September 30,

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

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

22 unchanged sentences

Total off-balance sheet exposure $ 13,039 126 — — — 12,913

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

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

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

Allowance for Credit Losses

Personal Banking:

Residential mortgage loans $ 17,967 11,331 ( 1,487 ) 750 7,373

Home equity loans 5,448 127 ( 1,237 ) 1,258 5,300

Vehicle loans 17,004 2,159 ( 2,517 ) 1,879 15,483

Consumer loans 825 479 ( 3,459 ) 921 2,884

Total Personal Banking 41,244 14,096 ( 8,700 ) 4,808 31,040

Commercial Banking:

Commercial real estate loans 49,649 ( 6,465 ) ( 6,745 ) 8,718 54,141

Commercial real estate loans - owner occupied 4,087 167 — 37 3,883

Commercial loans 14,839 1,039 ( 1,253 ) 1,876 13,177

Total Commercial Banking 68,575 ( 5,259 ) ( 7,998 ) 10,631 71,201

Total $ 109,819 8,837 ( 16,698 ) 15,439 102,241

Allowance for Credit Losses -

off-balance sheet exposure

Personal Banking:

Residential mortgage loans $ 4 2 — — 2

Home equity loans 74 35 — — 39

Total Personal Banking 78 37 — — 41

Commercial Banking:

Commercial real estate loans 5,382 4,501 — — 881

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

Commercial loans 5,288 3,894 — — 1,394

Total Commercial Banking 10,957 8,540 — — 2,417

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

During the nine months ended September 30, 2022, the Company purchased a total of $ 182.8 million small business equipment finance loan pools and a total of $ 188.3 million one- to four-family jumbo mortgage loan pools.

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at September 30, 2023 (in thousands):

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):

receivable Allowance for

13 unchanged sentences

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

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):

receivable Allowance for

credit losses Nonaccrual

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

TDRs Additional

classified as

loans Loans 90 days past due and accruing

Personal Banking:

10 unchanged sentences

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

(1) Includes $ 29.2 million of nonaccrual TDRs.

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 nine-month period ended September 30, 2023 (in thousands):

September 30, 2023

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

11 unchanged sentences

Total $ 94,384 71,125 23,935 95,060 2,452

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

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):

13 unchanged sentences

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

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

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

Real estate Total

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

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:

4 unchanged sentences

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

Real estate Equipment Total

Personal Banking:

Residential mortgage loans $ 569 — 569

Home equity loans 100 — 100

Total Personal Banking 669 — 669

Real estate Total

Commercial Banking:

11 unchanged sentences

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

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

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

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

For the quarter ended March 31,

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:

10 unchanged sentences

Total $ 29,241 1,341 96 0.27 % 1,297 3 0.01 %

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

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

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

For the quarter ended March 31,

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:

9 unchanged sentences

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

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

The following table presents the performance of loans modified within the previous twelve months of March 31, 2024 :

Current 30-59 days

8 unchanged sentences

Commercial real estate loans 29,121 — — —

Commercial real estate loans - owner occupied — — — —

Commercial loans 10 9 47 —

1 unchanged sentence

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 and were modified since the adoption of ASU 2022-02 to borrowers experiencing financial difficulty (in thousands) :

Term extension

Commercial Banking:

Commercial real estate loans $ 123

Commercial loans 648

Total Commercial Banking 771

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

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

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

Number of Contracts Amount Number of Contracts Amount

Beginning TDR balance:

128 $ 54,237 134 $ 30,288

New TDRs 6 221 8 25,626

Re-modified TDRs 4 977 10 1,178

Net paydowns — ( 810 ) — ( 1,609 )

Residential mortgage loans — — 1 ( 3 )

Paid-off loans:

Residential mortgage loans 1 ( 35 ) 2 ( 236 )

Home equity loans 1 ( 11 ) 3 ( 88 )

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

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

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

Ending TDR balance:

127 $ 46,750 127 $ 46,750

Accruing TDRs $ 16,344 $ 16,344

Nonaccrual TDRs 30,406 30,406

The following table provides information related to TDRs (including re-modified TDRs) by portfolio segment and by class of financing receivable during the periods indicated, prior to the adoption of ASU 2022-02 (dollars in thousands):

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

contracts Recorded

at the time of

modification Current

investment Current

allowance Number of

contracts Recorded

at the time of

modification Current

investment Current

Personal Banking:

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

Home equity loans 5 160 154 23 5 160 154 23

Total Personal Banking 7 307 298 38 7 307 298 38

Commercial Banking:

Commercial real estate loans 1 $ 610 609 89 5 $ 34,295 26,212 102

Commercial loans 2 332 291 20 6 3,856 294 20

Total Commercial Banking 3 942 900 109 11 38,151 26,506 122

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

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

Type of modification

Number of contracts Maturity date Total

Personal Banking:

Residential mortgage loans 2 $ 144 144

Home equity loans

Total Personal Banking 7 298 298

Commercial Banking:

Commercial real estate loans 1 $ 609 609

Commercial loans 2 291 291

Total Commercial Banking 3 900 900

Total 10 $ 1,198 1,198

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

Type of modification

Number of contracts Rate Maturity date Total

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:

2 unchanged sentences

Total Personal Banking 17 364

Commercial Banking:

Commercial real estate loans 5 $ 4,166 22,046 26,212

Commercial loans 6 — 294 294

Total Commercial Banking 11 4,166 22,340 26,506

Total $ 17 $ 364

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

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

No loans modified since the adoption of ASU 2022-02 subsequently defaulted during the quarter ended March 31, 2023.

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):

delinquent 60-89 days

66 unchanged sentences

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

The following table presents the amortized cost basis of our loan portfolio by year of origination and credit quality indicator and the current period charge-offs by year of origination for each portfolio segment as of September 30, 2023 (in thousands):

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

YTD March 31, 2024 2023 2022 2021 2020 Prior Revolving loans Revolving loans converted to term loans Total loans

Personal Banking:

20 unchanged sentences

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

Business Banking:

Commercial Banking:

Commercial real estate loans

16 unchanged sentences

Commercial loans current period charge-offs — ( 47 ) ( 734 ) ( 75 ) ( 175 ) ( 132 ) — — ( 1,163 )

Total Business Banking 460,791 971,384 510,547 407,859 369,861 1,126,829 542,420 33,935 4,423,626

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 nine months ended September 30, 2023, $ 13.7 million of revolving loans were converted to term loans.

For the quarter ended March 31, 2024, $ 3 million of revolving loans were converted to term loans.

The following table presents the amortized cost basis of our loan portfolio by year of origination and credit quality indicator for each portfolio segment as of December 31, 2023 (in thousands):

5 unchanged sentences

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

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

Home equity loans

2 unchanged sentences

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

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

Vehicle loans

2 unchanged sentences

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

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

Consumer loans

2 unchanged sentences

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

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

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

Business Banking:

Commercial Banking:

Commercial real estate loans

3 unchanged sentences

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

Commercial real estate - owner occupied

Commercial real estate current period

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

Commercial real estate loans -

owner occupied

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

1 unchanged sentence

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

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

Total commercial real estate loans -

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

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

Commercial loans

3 unchanged sentences

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

Total Business Banking 869,339 512,918 462,521 398,606 319,410 970,375 397,904 24,451 3,955,524

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

2 unchanged sentences

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Amortizable intangible assets:

2 unchanged sentences

Core deposit intangibles - net $ 4,589 5,290

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

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

Customer and Contract intangible assets - net — 28

Total intangible assets - net $ 4,589 5,290

The following table shows the actual aggregate amortization expense for the quarters ended September 30, 2023 and 2022, as well as the estimated aggregate amortization expense, based upon current levels of intangible assets, for the current fiscal year and each of the five succeeding fiscal years (in thousands):

For the quarter ended September 30, 2023 $ 795

For the quarter ended September 30, 2022 1,047

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

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

For the year ending December 31, 2023 3,270

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

4 unchanged sentences

Balance at December 31, 2023 $ 380,997

Balance at September 30, 2023 $ 380,997

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

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

September 30, 2023 December 31, 2022

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

5 unchanged sentences

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

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

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.

1 unchanged sentence

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

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

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

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

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

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

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.

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

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

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

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

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

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

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

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

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

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

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

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

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 5.63 % 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.

2 unchanged sentences

The subordinated debt issuance costs of approximately $ 2 million are being amortized over five years on a straight-line basis into interest expense.

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

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

7 unchanged sentences

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

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

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 %

20 unchanged sentences

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

For 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.

13 unchanged sentences

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

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

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

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 $ 578,000 at September 30, 2023.

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;

4 unchanged sentences

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

Quarter ended September 30, Nine months ended September 30,

2023 2022 2023 2022

Quarter ended March 31,

Net income $ 29,163 33,679

2 unchanged sentences

Weighted average common shares outstanding 126,814,233 126,498,512

Participating shares outstanding 320,177 565,729 320,177 565,729

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

3 unchanged sentences

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

Quarter ended September 30,

Pension benefits Other post-retirement benefits

2023 2022 2023 2022

Service cost $ 1,560 2,599 — —

Interest cost 2,245 1,671 7 10

Expected return on plan assets ( 3,479 ) ( 3,864 ) — —

Amortization of prior service cost ( 564 ) ( 564 ) — —

Amortization of the net loss 20 381 10 2

Net periodic cost $ ( 218 ) 223 17 12

Nine months ended September 30,

Quarter ended March 31,

Pension benefits Other post-retirement benefits

28 unchanged sentences

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

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

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.

Marketable Securities

51 unchanged sentences

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

At September 30, 2023 and December 31, 2022, there was no significant unrealized appreciation or depreciation on these financial instruments.

The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the Consolidated Statement of Financial Condition at September 30, 2023 (in thousands):

At March 31, 2024 and December 31, 2023, there was no significant unrealized appreciation or depreciation on these financial instruments.

The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the Consolidated Statement of Financial Condition at March 31, 2024 (in thousands):

amount Estimated

8 unchanged sentences

Interest rate lock commitments 479 479 — — 479

Forward commitments 58 58 — 58 —

Foreign exchange swaps 2 2 — 2 —

9 unchanged sentences

Junior subordinated debentures 129,639 123,167 — — 123,167

Forward commitments 23 23 — 23 —

Foreign exchange swaps 10 10 — 10 —

Interest rate swaps not designated as hedging instruments 45,220 45,220 — 45,220 —

14 unchanged sentences

Forward commitments 12 12 — 12 —

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

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

8 unchanged sentences

Foreign exchange swaps 291 291 — 291 —

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

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

3 unchanged sentences

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

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

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

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.

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

17 unchanged sentences

Interest rate lock commitments — — 479 479

Forward commitments — 58 — 58

Foreign exchange swaps — 2 — 2

2 unchanged sentences

Total assets $ — 1,141,557 479 1,142,036

Forward commitments $ — 23 — 23

Foreign exchange swaps — 10 — 10

Interest rate swaps not designated as hedging instruments — 45,220 — 45,220

22 unchanged sentences

Forward commitments — 12 — 12

Interest rate swaps designated as hedging instruments — 713 — 713

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

1 unchanged sentence

Foreign exchange swaps $ — 291 — 291

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

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

2 unchanged sentences

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

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

2023 2022 2023 2022

For the quarter ended March 31,

Beginning balance, $ 641 559

3 unchanged sentences

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans held-for-sale, loans individually assessed, real estate owned, and mortgage servicing rights.

The following table represents the fair market measurement for only those nonrecurring assets that had a fair market value below the carrying amount as of September 30, 2023 (in thousands):

The following table represents the fair market measurement for only those nonrecurring assets that had a fair market value below the carrying amount as of March 31, 2024 (in thousands):

Level 1 Level 2 Level 3 Total assets

23 unchanged sentences

We classify real estate owned as nonrecurring Level 3.

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at September 30, 2023 (in thousands):

Fair value Valuation techniques Significant

14 unchanged sentences

Derivatives Designated as Hedging Instruments

As of September 30, 2023, the Company has entered into seven separate pay-fixed interest rate swaps in order to synthetically convert short-term three month FHLB advances to fixed-rate term funding with an aggregate value of $ 175 million with maturities ranging from three to five years .

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.

25 unchanged sentences

Notional amount Fair value Notional amount Fair value

At September 30, 2023

At March 31, 2024

Derivatives designated as hedging instruments:

8 unchanged sentences

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:

6 unchanged sentences

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

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

2023 2022 2023 2022

For the quarter ended March 31,

Hedging derivatives:

2 unchanged sentences

Increase/(decrease) in other income $ 287 ( 202 )

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

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

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

10 unchanged sentences

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

As of September 30, 2023, we do not anticipate that the aggregate ultimate liability arising out of any pending or threatened legal proceedings will be material to our Consolidated Financial Statements.

As of 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.

2 unchanged sentences

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

For the quarter ended September 30, 2023

For the quarter ended March 31, 2024

on securities

3 unchanged sentences

pension plans Total

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

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 )

1 unchanged sentence

Net other comprehensive (loss)/income ( 5,698 ) 2,154 ( 388 ) ( 3,932 )

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

For the quarter ended September 30, 2022

on securities

available-for-sale Change in

defined benefit

pension plans Total

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

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

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

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

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

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

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

(3) Consists of realized gains, net of tax of $ 152 .

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

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

For the nine months ended September 30, 2023

Balance as of March 31, 2024 $ ( 156,357 ) 1,780 1,153 ( 153,424 )

For the quarter ended March 31, 2023

on securities

available-for-sale Change in

rate swaps Change in

defined benefit

1 unchanged sentence

Balance as of December 31, 2022 $ ( 164,206 ) ( 6,952 ) ( 171,158 )

Other comprehensive (loss)/income before reclassification adjustments (1) (3) ( 34,417 ) 3,562 — ( 30,855 )

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

For the nine months ended September 30, 2022

on securities

available-for-sale Change in

defined benefit

pension plans Total

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

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

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

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

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

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

(2) Change in fair value of interest rate swaps, net of tax ($ 630 ).

(3) Consists of realized gains, net of tax of $ 147 .

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

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

(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.

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

What changed 10-Q

Item 1. Financial Statements