Northwest Bancshares, Inc. 10-Q

Item 1. FINANCIAL STATEMENTS NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) (in thousands, except share data) September 30, 2024 December 31, 2023 Assets Cash and cash equivalents $ 226,883 122,260 Marketable securities available-for-sale (amortized cost of $ 1,248,104 and $ 1,240,003 , respectively) 1,111,868 1,043,359 Marketable securities held-to-maturity (fair value of $ 672,641 and $ 699,506 , respectively) 766,772 814,839 Total cash and cash equivalents and marketable securities 2,105,523 1,980,458 Loans held-for-sale 9,370 8,768 Loans held for investment 11,295,188 11,406,041 Allowance for credit losses ( 125,813 ) ( 125,243 ) Loans receivable, net 11,178,745 11,289,566 FHLB stock, at cost 21,223 30,146 Accrued interest receivable 46,678 47,353 Real estate owned, net 76 104 Premises and equipment, net 126,391 138,838 Bank-owned life insurance 255,324 251,895 Goodwill 380,997 380,997 Other intangible assets, net 3,363 5,290 Other assets 236,005 294,458 Total assets $ 14,354,325 14,419,105 Liabilities and shareholders’ equity Liabilities: Noninterest-bearing demand deposits $ 2,581,769 2,669,023 Interest-bearing demand deposits 2,676,779 2,634,546 Money market deposit accounts 1,956,747 1,968,218 Savings deposits 2,145,735 2,105,234 Time deposits 2,710,049 2,602,881 Total deposits 12,071,079 11,979,902 Borrowed funds 204,374 398,895 Subordinated debt 114,451 114,189 Junior subordinated debentures 129,769 129,574 Advances by borrowers for taxes and insurance 24,700 45,253 Accrued interest payable 15,125 13,669 Other liabilities 203,502 186,306 Total liabilities 12,763,000 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, 127,400,199 and 127,110,453 shares issued and outstanding, respectively 1,274 1,271 Additional paid-in capital 1,030,384 1,024,852 Retained earnings 665,845 674,686 Accumulated other comprehensive loss ( 106,178 ) ( 149,492 ) Total shareholders’ equity 1,591,325 1,551,317 Total liabilities and shareholders’ equity $ 14,354,325 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 September 30, Nine months ended September 30, 2024 2023 2024 2023 Interest income: Loans receivable $ 156,413 140,667 459,938 397,136 Mortgage-backed securities 10,908 8,072 28,278 24,935 Taxable investment securities 842 786 2,364 2,472 Tax-free investment securities 512 491 1,460 1,858 FHLB stock dividends 394 668 1,499 2,202 Interest-earning deposits 2,312 914 4,935 1,931 Total interest income 171,381 151,598 498,474 430,534 Interest expense: Deposits 54,198 31,688 154,638 64,743 Borrowed funds 5,881 11,542 22,455 36,410 Total interest expense 60,079 43,230 177,093 101,153 Net interest income 111,302 108,368 321,381 329,381 Provision for credit losses - loans 5,727 3,983 12,130 14,863 Provision/(benefit) for credit losses - unfunded commitments ( 852 ) ( 2,981 ) ( 4,190 ) 65 Net interest income after provision for credit losses 106,427 107,366 313,441 314,453 Noninterest income: Loss on sale of investments — — ( 39,413 ) ( 8,306 ) Gain on sale of mortgage servicing rights — — — 8,305 Gain on sale of SBA loans 667 301 2,997 1,412 Service charges and fees 15,932 15,270 46,982 43,292 Trust and other financial services income 7,924 7,085 22,617 20,400 Gain on real estate owned, net 105 29 649 922 Income from bank-owned life insurance 1,434 4,561 4,307 7,134 Mortgage banking income 744 632 2,097 2,184 Other operating income 1,027 3,010 6,711 9,311 Total noninterest income 27,833 30,888 46,947 84,654 Noninterest expense: Compensation and employee benefits 56,186 51,243 161,257 145,497 Premises and occupancy costs 7,115 7,052 22,206 22,102 Office operations 2,811 3,398 9,397 9,208 Collections expense 474 551 1,216 1,367 Processing expenses 14,570 14,672 43,990 43,670 Marketing expenses 2,004 2,379 6,563 8,127 Federal deposit insurance premiums 2,763 2,341 8,651 6,628 Professional services 3,302 3,002 11,095 11,564 Amortization of intangible assets 590 795 1,926 2,546 Real estate owned expense 23 141 146 405 Merger, asset disposition and restructuring expense 43 — 2,913 4,395 Other expenses 886 1,996 3,851 5,369 Total noninterest expense 90,767 87,570 273,211 260,878 Income before income taxes 43,493 50,684 87,177 138,229 Federal and state income taxes expense 9,875 11,464 19,649 32,286 Net income $ 33,618 39,220 67,528 105,943 Basic earnings per share $ 0.26 0.31 0.53 0.83 Diluted earnings per share $ 0.26 0.31 0.53 0.83 See accompanying notes to unaudited Consolidated Financial Statements. 2 Table of Contents NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands) Quarter ended September 30, Nine months ended September 30, 2024 2023 2024 2023 Net income $ 33,618 39,220 67,528 105,943 Other comprehensive income/(loss) net of tax: Net unrealized holding gains/(losses) on marketable securities: Unrealized holding gains/(losses), net of tax of ($ 8,980 ), $ 9,140 , ($ 7,054 ) and $ 9,603 , respectively 27,947 ( 29,715 ) 18,858 ( 34,417 ) Reclassification adjustment for losses included in net income, net of tax of $ 0 , $ 0 , ($ 7,706 ) and ($ 1,731 ), respectively — — 26,789 5,636 Net unrealized holding gains/(losses) on marketable securities 27,947 ( 29,715 ) 45,647 ( 28,781 ) Change in fair value of interest rate swaps, net of tax of $ 1,068 , ($ 533 ), $ 342 and ($ 1,041 ), respectively ( 3,654 ) 1,825 ( 1,170 ) 3,562 Defined benefit plan: Actuarial reclassification adjustments for prior period service costs and actuarial gains included in net income, net of tax of $ 148 , $ 152 , $ 442 and $ 456 , respectively ( 387 ) ( 382 ) ( 1,163 ) ( 1,146 ) Other comprehensive income/(loss) 23,906 ( 28,272 ) 43,314 ( 26,365 ) Total comprehensive income $ 57,524 10,948 110,842 79,578 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 income/(loss) Total shareholders’ equity Common stock Quarter ended September 30, 2024 Shares Amount Beginning balance at June 30, 2024 127,307,997 $ 1,273 1,027,703 657,706 ( 130,084 ) 1,556,598 Comprehensive income: Net income — — — 33,618 — 33,618 Other comprehensive income, net of tax of ($ 7,764 ) — — — — 23,906 23,906 Total comprehensive income — — — 33,618 23,906 57,524 Exercise of stock options 94,731 1 1,098 — — 1,099 Stock-based compensation expense 9,928 — 1,583 — — 1,583 Stock-based compensation forfeited ( 12,457 ) — — — — — Dividends paid ($ 0.20 per share) — — — ( 25,479 ) — ( 25,479 ) Ending balance at September 30, 2024 127,400,199 $ 1,274 1,030,384 665,845 ( 106,178 ) 1,591,325 Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total shareholders’ equity Common stock Quarter ended September 30, 2023 Shares Amount Beginning balance at June 30, 2023 127,088,963 $ 1,271 1,022,189 657,292 ( 169,251 ) 1,511,501 Comprehensive income: Net income — — — 39,220 — 39,220 Other comprehensive loss, net of tax of $ 8,759 — — — — ( 28,272 ) ( 28,272 ) Total comprehensive income/(loss) — — — 39,220 ( 28,272 ) 10,948 Exercise of stock options 11,523 — 112 — — 112 Stock-based compensation expense 1,779 — 1,290 — — 1,290 Stock-based compensation forfeited ( 916 ) — — — — — Dividends paid ($ 0.20 per share) — — — ( 25,420 ) — ( 25,420 ) Ending balance at September 30, 2023 127,101,349 $ 1,271 1,023,591 671,092 ( 197,523 ) 1,498,431 See accompanying notes to unaudited Consolidated Financial Statements. 4 Table of Contents 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 Common stock Nine months ended September 30, 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 — — — 67,528 — 67,528 Other comprehensive income, net of tax of ($ 13,976 ) — — — — 43,314 43,314 Total comprehensive income — — — 67,528 43,314 110,842 Exercise of stock options 101,123 1 1,179 — — 1,180 Stock-based compensation expense 213,906 2 4,353 — — 4,355 Stock-based compensation forfeited ( 25,283 ) — — — — — Dividends paid ($ 0.60 per share) — — — ( 76,369 ) — ( 76,369 ) Ending balance at September 30, 2024 127,400,199 $ 1,274 1,030,384 665,845 ( 106,178 ) 1,591,325 Additional paid-in capital Retained earnings Accumulated other comprehensive income/(loss) Total shareholders’ equity Common stock Nine months ended September 30, 2023 Shares Amount Beginning balance at December 31, 2022 127,028,848 $ 1,270 1,019,647 641,727 ( 171,158 ) 1,491,486 Comprehensive income: Net income — — — 105,943 — 105,943 Other comprehensive income, net of tax of $ 7,287 — — — — ( 26,365 ) ( 26,365 ) Total comprehensive income — — — 105,943 ( 26,365 ) 79,578 Adoption of ASU No. 2022-02 — — — ( 329 ) — ( 329 ) Exercise of stock options 53,207 1 609 — — 610 Stock-based compensation expense 75,554 1 3,334 — — 3,335 Stock-based compensation forfeited ( 56,260 ) ( 1 ) 1 — — — Dividends paid ($ 0.60 per share) — — — ( 76,249 ) — ( 76,249 ) Ending balance at September 30, 2023 127,101,349 $ 1,271 1,023,591 671,092 ( 197,523 ) 1,498,431 See accompanying notes to unaudited Consolidated Financial Statements. 5 Table of Contents NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Nine months ended September 30, 2024 2023 Operating activities: Net income $ 67,528 105,943 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 7,940 14,928 Loss on sale of investments 39,413 8,306 Net (gain)/loss on sale of assets ( 5,646 ) 743 Mortgage banking activity ( 2,616 ) 5,342 Gain on sale of SBA loans ( 2,873 ) ( 1,390 ) Gain on sale of mortgage servicing rights — ( 8,305 ) Net depreciation, amortization and accretion 18,113 16,473 Decrease/(increase) in other assets 44,932 ( 114,158 ) Increase in other liabilities 19,721 15,617 Net amortization on marketable securities 754 2,438 Noncash compensation expense related to stock benefit plans 4,355 3,335 Noncash write-down of other assets 6,140 37 Deferred income tax expense 2,641 ( 3,610 ) Origination of loans held-for-sale ( 150,354 ) ( 137,789 ) Proceeds from sale of loans held-for-sale 154,594 139,819 Net cash provided by operating activities 204,642 47,729 Investing activities: Purchase of marketable securities available-for-sale ( 383,192 ) ( 23,502 ) Proceeds from maturities and principal reductions of marketable securities held-to-maturity 47,482 50,517 Proceeds from maturities and principal reductions of marketable securities available-for-sale 59,925 81,803 Proceeds from sale of marketable securities available-for-sale 275,585 101,229 Proceeds from bank-owned life insurance 874 2,798 Loan originations ( 2,729,306 ) ( 2,928,360 ) Proceeds from sale of mortgage servicing rights — 13,118 Proceeds from loan maturities and principal reductions 2,820,106 2,524,676 Net proceeds/(redemptions) of FHLB stock 8,923 ( 261 ) Proceeds from sale of real estate owned 746 1,343 Purchases of premises and equipment, net ( 2,076 ) ( 1,617 ) Net cash provided by/(used in) investing activities 99,067 ( 178,256 ) Financing activities: Net increase in deposits 91,177 325,334 Net decrease in short-term borrowings ( 194,521 ) ( 76,578 ) Decrease in advances by borrowers for taxes and insurance ( 20,553 ) ( 19,960 ) Cash dividends paid on common stock ( 76,369 ) ( 76,249 ) Proceeds from stock options exercised 1,180 610 Net cash (used in)/provided by financing activities ( 199,086 ) 153,157 Net increase in cash and cash equivalents $ 104,623 22,630 Cash and cash equivalents at beginning of period $ 122,260 139,365 Net increase in cash and cash equivalents 104,623 22,630 Cash and cash equivalents at end of period $ 226,883 161,995 Cash paid during the period for: Interest on deposits and borrowings (including interest credited to deposit accounts of $ 81,238 and $ 56,021 , respectively) $ 175,637 96,469 Income taxes 15,245 38,236 Non-cash activities: Loan foreclosures and repossessions $ 3,259 2,844 Sale of real estate owned financed by the Company — 70 See accompanying notes to unaudited Consolidated Financial Statements. 6 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 141 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 September 30, 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 LIHTCs 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. 7 Table of Contents (2) Marketable Securities The following table shows the portfolio of marketable securities available-for-sale at September 30, 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 ten years $ 46,292 — ( 8,497 ) 37,795 Debt issued by government-sponsored enterprises: Due after one year through five years 136 — ( 4 ) 132 Municipal securities: Due after one year through five years 884 18 ( 2 ) 900 Due after five years through ten years 15,729 277 ( 1,382 ) 14,624 Due after ten years 52,244 288 ( 6,971 ) 45,561 Corporate debt issues: Due after five years through ten years 25,396 307 ( 867 ) 24,836 Mortgage-backed securities: Fixed rate pass-through 222,573 2,926 ( 12,641 ) 212,858 Variable rate pass-through 3,905 57 ( 4 ) 3,958 Fixed rate agency CMOs 835,445 3,801 ( 113,373 ) 725,873 Variable rate agency CMOs 45,500 44 ( 213 ) 45,331 Total mortgage-backed securities 1,107,423 6,828 ( 126,231 ) 988,020 Total marketable securities available-for-sale $ 1,248,104 7,718 ( 143,954 ) 1,111,868 8 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 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 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 September 30, 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 $ 109,460 — ( 10,520 ) 98,940 Due after five years through ten years 15,000 — ( 1,923 ) 13,077 Mortgage-backed securities: Fixed rate pass-through 136,439 — ( 16,184 ) 120,255 Variable rate pass-through 387 — — 387 Fixed rate agency CMOs 504,957 — ( 65,502 ) 439,455 Variable rate agency CMOs 529 — ( 2 ) 527 Total mortgage-backed securities 642,312 — ( 81,688 ) 560,624 Total marketable securities held-to-maturity $ 766,772 — ( 94,131 ) 672,641 9 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 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 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 mortgage-backed securities available-for-sale at September 30, 2024 (in thousands): Amortized cost Fair value Mortgage-backed securities: Due within one year $ 42 43 Due after one year through five years 10,889 10,807 Due after five years through ten years 8,723 7,928 Due after ten years 1,087,769 969,242 Total mortgage-backed securities $ 1,107,423 988,020 The following table shows the contractual maturity of our mortgage-backed securities held-to-maturity at September 30, 2024 (in thousands): Amortized cost Fair value Mortgage-backed securities: Due within one year $ 64 62 Due after one year through five years 19,983 18,219 Due after five years through ten years 20,192 17,088 Due after ten years 602,073 525,255 Total mortgage-backed securities $ 642,312 560,624 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, 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 $ — — 149,944 ( 20,944 ) 149,944 ( 20,944 ) Municipal securities — — 41,002 ( 8,355 ) 41,002 ( 8,355 ) Corporate issues 2,677 ( 92 ) 7,694 ( 775 ) 10,371 ( 867 ) Mortgage-backed securities - agency 50,187 ( 174 ) 1,183,798 ( 207,745 ) 1,233,985 ( 207,919 ) Total $ 52,864 ( 266 ) 1,382,438 ( 237,819 ) 1,435,302 ( 238,085 ) 10 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 ) 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 September 30, 2024, which were comprised of 325 individual securities, represent 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 September 30, 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 September 30, 2024. The following table presents the credit quality of our held-to-maturity securities, based on the latest information available as of September 30, 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, 2024. AA+ Total Held-to-maturity securities (at amortized cost): Debt issued by the U.S. government-sponsored enterprises $ 124,460 124,460 Mortgage-backed securities 642,312 642,312 Total marketable securities held-to-maturity $ 766,772 766,772 11 Table of Contents (3) Loans Receivable The following table shows a summary of our loans receivable at amortized cost basis at September 30, 2024 and December 31, 2023 (in thousands): September 30, 2024 December 31, 2023 Originated (1) Acquired (2) Total Originated (1) Acquired (2) Total Personal Banking: Residential mortgage loans (3) $ 3,128,027 130,131 3,258,158 3,283,299 144,886 3,428,185 Home equity loans 1,063,095 104,107 1,167,202 1,103,410 124,448 1,227,858 Vehicle loans 1,824,554 50,393 1,874,947 1,943,540 65,061 2,008,601 Consumer loans 95,406 27,679 123,085 111,446 5,980 117,426 Total Personal Banking 6,111,082 312,310 6,423,392 6,441,695 340,375 6,782,070 Commercial Banking: Commercial real estate loans (4) 2,422,509 210,672 2,633,181 2,389,537 238,920 2,628,457 Commercial real estate loans - owner occupied 337,561 23,637 361,198 319,195 26,358 345,553 Commercial loans 1,881,643 5,144 1,886,787 1,623,481 35,248 1,658,729 Total Commercial Banking 4,641,713 239,453 4,881,166 4,332,213 300,526 4,632,739 Total loans receivable, gross 10,752,795 551,763 11,304,558 10,773,908 640,901 11,414,809 Allowance for credit losses ( 120,883 ) ( 4,930 ) ( 125,813 ) ( 118,079 ) ( 7,164 ) ( 125,243 ) Total loans receivable, net (5) $ 10,631,912 546,833 11,178,745 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) Includ es $ 9 million of l oans held-for-sale at September 30, 2024 and December 31, 2023. (4) Includes $ 0 of loans held-for-sale at September 30, 2024 and December 31, 2023. (5) Includes $ 60 million and $ 68 million of net unearned income, unamortized premiums and discounts and deferred fees and costs at September 30, 2024 and December 31, 2023. 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 September 30, 2024 (in thousands): Balance as of September 30, 2024 Current period provision Charge-offs Recoveries Balance as of June 30, 2024 Allowance for Credit Losses Personal Banking: Residential mortgage loans $ 13,553 ( 1,444 ) ( 255 ) 253 14,999 Home equity loans 4,704 187 ( 890 ) 197 5,210 Vehicle loans 22,162 2,371 ( 2,064 ) 491 21,364 Consumer loans 1,869 1,327 ( 1,496 ) 370 1,668 Total Personal Banking 42,288 2,441 ( 4,705 ) 1,311 43,241 Commercial Banking: Commercial real estate loans 48,613 ( 1,577 ) ( 475 ) 106 50,559 Commercial real estate loans - owner occupied 3,849 223 — 11 3,615 Commercial loans 31,063 4,640 ( 1,580 ) 348 27,655 Total Commercial Banking 83,525 3,286 ( 2,055 ) 465 81,829 Total $ 125,813 5,727 ( 6,760 ) 1,776 125,070 Allowance for Credit Losses - off-balance sheet exposure Personal Banking: Residential mortgage loans $ — ( 1 ) — — 1 Home equity loans 59 ( 4 ) — — 63 Total Personal Banking 59 ( 5 ) — — 64 Commercial Banking: Commercial real estate loans 3,407 ( 1,043 ) — — 4,450 Commercial real estate loans - owner occupied 159 8 — — 151 Commercial loans 9,308 188 — — 9,120 Total Commercial Banking 12,874 ( 847 ) — — 13,721 Total off-balance sheet exposure $ 12,933 ( 852 ) — — 13,785 13 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 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 14 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 nine months ended September 30, 2024 (in thousands): Balance September 30, 2024 Current period provision Charge-offs Recoveries Balance December 31, 2023 Allowance for Credit Losses Personal Banking: Residential mortgage loans $ 13,553 ( 5,218 ) ( 669 ) 1,247 18,193 Home equity loans 4,704 53 ( 1,539 ) 787 5,403 Vehicle loans 22,162 444 ( 6,578 ) 1,385 26,911 Consumer loans 1,869 3,610 ( 4,116 ) 1,176 1,199 Total Personal Banking 42,288 ( 1,111 ) ( 12,902 ) 4,595 51,706 Commercial Banking: Commercial real estate loans 48,613 ( 2,289 ) ( 1,324 ) 959 51,267 Commercial real estate loans - owner occupied 3,849 42 — 32 3,775 Commercial loans 31,063 15,488 ( 4,062 ) 1,142 18,495 Total Commercial Banking 83,525 13,241 ( 5,386 ) 2,133 73,537 Total $ 125,813 12,130 ( 18,288 ) 6,728 125,243 Allowance for Credit Losses - off-balance sheet exposure Personal Banking: Residential mortgage loans $ — ( 2 ) — — 2 Home equity loans 59 ( 6 ) — — 65 Total Personal Banking 59 ( 8 ) — — 67 Commercial Banking: Commercial real estate loans 3,407 ( 2,740 ) — — 6,147 Commercial real estate loans - owner occupied 159 ( 14 ) — — 173 Commercial loans 9,308 ( 1,428 ) — — 10,736 Total Commercial Banking 12,874 ( 4,182 ) — — 17,056 Total off-balance sheet exposure $ 12,933 ( 4,190 ) — — 17,123 15 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 nine months ended September 30, 2023 (in thousands): Balance September 30, 2023 Current period provision Charge-offs Recoveries ASU 2022-02 Adoption Balance December 31, 2022 Allowance for Credit Losses Personal Banking: Residential mortgage loans $ 17,090 ( 2,047 ) ( 923 ) 799 — 19,261 Home equity loans 5,044 ( 705 ) ( 719 ) 566 — 5,902 Vehicle loans 27,226 7,267 ( 4,731 ) 1,631 — 23,059 Consumer loans 1,202 3,463 ( 3,860 ) 934 — 665 Total Personal Banking 50,562 7,978 ( 10,233 ) 3,930 — 48,887 Commercial Banking: Commercial real estate loans 48,582 3,587 ( 1,556 ) 1,619 426 44,506 Commercial real estate loans - owner occupied 3,479 ( 515 ) ( 68 ) 58 — 4,004 Commercial loans 22,218 3,813 ( 3,360 ) 1,126 — 20,639 Total Commercial Banking 74,279 6,885 ( 4,984 ) 2,803 426 69,149 Total $ 124,841 14,863 ( 15,217 ) 6,733 426 118,036 Allowance for Credit Losses - off-balance sheet exposure Personal Banking: Residential mortgage loans 3 ( 1 ) — — — 4 Home equity loans 67 ( 7 ) — — — 74 Total Personal Banking 70 ( 8 ) — — — 78 Commercial Banking: Commercial real estate loans 4,797 ( 578 ) — — — 5,375 Commercial real estate loans - owner occupied 140 ( 239 ) — — — 379 Commercial loans 7,971 890 — — — 7,081 Total Commercial Banking 12,908 73 — — — 12,835 Total off-balance sheet exposure $ 12,978 65 — — — 12,913 16 Table of Contents The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at September 30, 2024 (in thousands): Total loans receivable Allowance for credit losses Nonaccrual loans Loans 90 days past due and accruing Personal Banking: Residential mortgage loans $ 3,258,158 13,553 7,541 — Home equity loans 1,167,202 4,704 4,041 — Vehicle loans 1,874,947 22,162 5,009 — Consumer loans 123,085 1,869 196 717 Total Personal Banking 6,423,392 42,288 16,787 717 Commercial Banking: Commercial real estate loans 2,633,181 48,613 42,612 — Commercial real estate loans - owner occupied 361,198 3,849 859 — Commercial loans 1,886,787 31,063 16,570 328 Total Commercial Banking 4,881,166 83,525 60,041 328 Total $ 11,304,558 125,813 76,828 1,045 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 17 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 period ended September 30, 2024 (in thousands): September 30, 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 6,707 834 7,541 — Home equity loans 4,492 3,900 141 4,041 — Vehicle loans 4,816 4,024 985 5,009 — Consumer loans 229 196 — 196 717 Total Personal Banking 18,264 14,827 1,960 16,787 717 Commercial Banking: Commercial real estate loans 71,297 22,695 19,917 42,612 — Commercial real estate loans - owner occupied 676 859 — 859 — Commercial loans 4,147 16,408 162 16,570 328 Total Commercial Banking 76,120 39,962 20,079 60,041 328 Total $ 94,384 54,789 22,039 76,828 1,045 During the three and nine months ended September 30, 2024, we d id 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 beginning and end 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. 18 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 September 30, 2024 (in thousands): Real estate Equipment Other Total Commercial Banking: Commercial real estate loans $ 36,268 — — 36,268 Commercial loans 3,014 5,061 2,583 10,658 Total Commercial Banking 39,282 5,061 2,583 46,926 Total $ 39,282 5,061 2,583 46,926 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 September 30, 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 $ — $ 494 — 0.02 % 192 — 0.01 % Home equity loans — 29 — 0.00 % 122 85 0.02 % Consumer loans — — 11 0.01 % — — — % Total Personal Banking — 523 11 0.01 % 314 85 0.01 % Commercial Banking: Commercial real estate loans 1,357 — — 0.05 % — — — % Commercial loans — 35 — — % 15 — — % Total Commercial Banking 1,357 35 — 0.03 % 15 — — % Total $ 1,357 $ 558 11 0.02 % 329 85 0.00 % 19 Table of Contents For the nine months ended September 30, 2024 2023 Payment delay Term extension Interest rate reduction 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 $ — 979 — — 0.03 % 450 — 0.01 % Home equity loans — 551 — 84 0.05 % 283 85 0.03 % Consumer loans — — — 13 0.01 % — 3 — % Total Personal Banking — 1,530 — 97 0.03 % 733 88 0.01 % Commercial Banking: Commercial real estate loans 1,628 202 — — 0.07 % 197 — 0.01 % Commercial real estate loans - owner occupied — — 680 — 0.19 % — — — % Commercial loans — 35 — 8 — % 663 — 0.04 % Total Commercial Banking 1,628 237 680 8 0.05 % 860 — 0.02 % Total $ 1,628 1,767 680 105 0.04 % 1,593 88 0.01 % 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, 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 — % 156 0 — % 169 Home equity loans — % 105 0 5 % 112 Consumer loans 5 % 10 0 12 % 0 Total Personal Banking 5 % 151 0 17 % 140 Commercial Banking: Commercial real estate loans — % 0 0.3 — % 0 Commercial loans — % 6 0 — % 23 Total Commercial Banking — % 6 0.3 — % 23 Total loans 5 % 142 0.3 17 % 135 20 Table of Contents For the nine months ended September 30, 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 — % 151 0 — 149 Home equity loans 2 % 99 0 5 % 96 Consumer loans 6 % 66 0 12 % 356 Total Personal Banking 3 % 130 0 17 % 126 Commercial Banking: Commercial real estate loans — % 117 0.5 — 25 Commercial real estate loans - owner occupied 2 % 0 0 — 0 Commercial loans 4 % 32 0 — 9 Total Commercial Banking 2 % 102 0.5 — 13 Total loans 2 % 126 0.5 17 % 68 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 September 30, 2024 (in thousands) : Current 30-59 days delinquent 60-89 days delinquent 90 days or greater delinquent Personal Banking: Residential mortgage loans $ 976 — — 3 Home equity loans 525 13 9 88 Consumer loans 13 — — — Total Personal Banking 1,514 13 9 91 Commercial Banking: Commercial real estate loans 1,830 — — — Commercial real estate loans - owner occupied 680 — — — Commercial loans 43 — — — Total Commercial Banking 2,553 — — — Total loans $ 4,067 13 9 91 The following table presents the performance of loans modified since the adoption of ASU 2022-02 as of September 30, 2023 (in thousands) : Current 30-59 days delinquent 60-89 days delinquent 90 days or greater delinquent Personal Banking: Residential mortgage loans $ 450 — — — Home equity loans 368 — — — Consumer loans 3 — — — Total Personal Banking 821 — — — Commercial Banking: Commercial real estate loans 74 — — 123 Commercial loans — 15 — 648 Total Commercial Banking 74 15 — 771 Total loans $ 895 15 — 771 21 Table of Contents 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 September 30, 2024 and were modified within the previous twelve months to borrowers experiencing financial difficulty (in thousands) : Term extension Personal Banking: Residential mortgage loans $ 3 Home equity loans 88 Total Personal Banking 91 Total $ 91 The following table provides the amortized cost basis of financing receivables that had a payment default during the period ended September 30, 2023 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 Total $ 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 table provides information related to the amortized cost basis of loan payment delinquencies at September 30, 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 $ 685 9,027 5,370 15,082 3,243,076 3,258,158 — Home equity loans 3,907 882 2,558 7,347 1,159,855 1,167,202 — Vehicle loans 9,808 3,166 3,077 16,051 1,858,896 1,874,947 — Consumer loans 969 434 906 2,309 120,776 123,085 717 Total Personal Banking 15,369 13,509 11,911 40,789 6,382,603 6,423,392 717 Commercial Banking: Commercial real estate loans 5,919 7,643 6,167 19,729 2,613,452 2,633,181 — Commercial real estate loans - owner occupied — — — — 361,198 361,198 — Commercial loans 3,260 753 14,484 18,497 1,868,290 1,886,787 328 Total Commercial Banking 9,179 8,396 20,651 38,226 4,842,940 4,881,166 328 Total loans $ 24,548 21,905 32,562 79,015 11,225,543 11,304,558 1,045 22 Table of Contents 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 23 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. 24 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 September 30, 2024 (in thousands): YTD September 30, 2024 2023 2022 2021 2020 Prior Revolving loans Revolving loans converted to term loans Total loans receivable Personal Banking: Residential mortgage loans Pass $ 23,970 195,945 638,920 759,324 478,181 1,150,387 — — 3,246,727 Substandard — 51 1,401 267 259 9,453 — — 11,431 Total residential mortgage loans 23,970 195,996 640,321 759,591 478,440 1,159,840 — — 3,258,158 Residential mortgage current period charge-offs — — ( 262 ) — ( 113 ) ( 294 ) — — ( 669 ) Home equity loans Pass 22,491 61,170 89,615 92,832 129,272 248,594 474,033 44,944 1,162,951 Substandard — — 120 91 162 1,613 1,308 957 4,251 Total home equity loans 22,491 61,170 89,735 92,923 129,434 250,207 475,341 45,901 1,167,202 Home equity current period charge-offs — — ( 41 ) ( 2 ) ( 197 ) ( 411 ) ( 557 ) ( 331 ) ( 1,539 ) Vehicle loans Pass 453,937 503,197 497,117 265,552 78,513 71,623 — — 1,869,939 Substandard 157 1,086 1,717 1,276 307 465 — — 5,008 Total vehicle loans 454,094 504,283 498,834 266,828 78,820 72,088 — — 1,874,947 Vehicle current period charge-offs ( 78 ) ( 1,705 ) ( 1,974 ) ( 1,644 ) ( 323 ) ( 854 ) — — ( 6,578 ) Consumer loans Pass 22,809 16,742 7,426 3,339 997 6,704 63,495 659 122,171 Substandard 3 61 25 8 — 14 722 81 914 Total consumer loans 22,812 16,803 7,451 3,347 997 6,718 64,217 740 123,085 Consumer loan current period charge-offs ( 349 ) ( 1,736 ) ( 470 ) ( 198 ) ( 62 ) ( 725 ) ( 543 ) ( 33 ) ( 4,116 ) Total Personal Banking 523,367 778,252 1,236,341 1,122,689 687,691 1,488,853 539,558 46,641 6,423,392 Commercial Banking: Commercial real estate loans Pass 133,296 240,845 481,825 261,936 293,395 871,032 24,784 23,890 2,331,003 Special mention — 4,294 17,645 18,323 14,570 15,376 746 — 70,954 Substandard — 6,902 41,510 48,625 21,533 112,403 175 76 231,224 Total commercial real estate loans 133,296 252,041 540,980 328,884 329,498 998,811 25,705 23,966 2,633,181 Commercial real estate current period charge-offs — — ( 44 ) ( 360 ) — ( 920 ) — — ( 1,324 ) Commercial real estate loans - owner occupied Pass 52,440 13,999 28,641 46,102 12,138 148,673 1,991 — 303,984 Special mention — 1,184 7,194 1,293 — 7,068 — — 16,739 Substandard — 12,865 875 — 4,595 18,679 751 2,710 40,475 Total commercial real estate loans - owner occupied 52,440 28,048 36,710 47,395 16,733 174,420 2,742 2,710 361,198 Commercial real estate - owner occupied current period charge-offs — — — — — — — — — Commercial loans Pass 510,269 380,280 279,532 32,637 14,137 56,373 531,611 3,594 1,808,433 Special mention 7,434 26,726 4,180 652 271 100 11,255 1,096 51,714 Substandard 349 10,075 5,506 1,001 148 1,689 4,746 3,126 26,640 Total commercial loans 518,052 417,081 289,218 34,290 14,556 58,162 547,612 7,816 1,886,787 Commercial loans current period charge-offs — ( 170 ) ( 2,777 ) ( 115 ) ( 226 ) ( 627 ) ( 119 ) ( 28 ) ( 4,062 ) Total Commercial Banking 703,788 697,170 866,908 410,569 360,787 1,231,393 576,059 34,492 4,881,166 Total loans $ 1,227,155 1,475,422 2,103,249 1,533,258 1,048,478 2,720,246 1,115,617 81,133 11,304,558 For the nine months ended September 30, 2024, $ 13 million of revolving loans were converted to term loans. 25 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. 26 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): September 30, 2024 December 31, 2023 Amortizable intangible assets: Core deposit intangibles - gross $ 74,899 74,899 Less: accumulated amortization ( 71,536 ) ( 69,609 ) Core deposit intangibles - net $ 3,363 5,290 Total intangible assets - net $ 3,363 5,290 The following table shows the actual aggregate amortization expense for the quarters ended September 30, 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 September 30, 2024 $ 590 For the quarter ended September 30, 2023 795 For the nine months ended September 30, 2024 1,926 For the nine months ended September 30, 2023 2,546 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 304 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 September 30, 2024 $ 380,997 We performed our annual goodwill impairment test as of June 30, 2024 in accordance with Accounting Standards Codification ("ASC") 350, Intangibles - Goodwill and Other, and concluded that goodwill was not impaired. (5) Borrowed Funds (a) Borrowings Borrowed funds at September 30, 2024 and December 31, 2023 are presented in the following table (dollars in thousands): September 30, 2024 December 31, 2023 Amount Average rate Amount Average rate Term notes payable to the FHLB of Pittsburgh, due within one year $ 175,000 5.15 % $ 175,000 5.71 % Notes payable to the FHLB of Pittsburgh, due within one year — — % 163,500 5.70 % Collateralized borrowings, due within one year 21,624 1.59 % 35,495 1.72 % Collateral received, due within one year 7,750 5.72 % 24,900 5.26 % Total borrowed funds $ 204,374 $ 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 September 30, 2024, the carrying value of these loans was $ 5.8 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 September 30, 2024 there was no balance on the revolving line of credit, and at December 31, 2023 the balance was $ 164 million. At September 30, 2024 and December 31, 2023, collateralized borrowings due within one year were $ 22 million and $ 35 million, respectively. These borrowings are collateralized by cash or va rious securities held in safekeeping by the FHLB. At September 30, 2024, the carrying value of the cash and securities used as collateral was $ 37 million. 27 Table of Contents At September 30, 2024 and December 31, 2023, collateral received was $ 8 million and $ 25 million, respectively. This represents collateral posted to us from our derivative counterparties. At September 30, 2024 and December 31, 2023, term notes payable to the FHLB of Pittsburgh due within one year were $ 175 million. The September 30, 2024 total is made up of seven advances: $ 25 million at 5.15 % maturing October 28, 2024; $ 25 million at 5.09 % maturing October 31, 2024; $ 25 million at 5.15 % maturing November 8, 2024; $ 25 million at 5.16 % maturing November 12, 2024; $ 25 million at 5.16 % maturing November 12, 2024; $ 25 million at 5.17 % maturing November 19, 2024; $ 25 million at 5.14 % maturing November 29, 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 September 30, 2024 and December 31, 2023, subordinated debentures, net of issuance costs, were $ 114 million. For the nine months ended September 30, 2024 and September 30, 2023 total interest expense paid on the subordinate notes was $ 4 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 September 30, 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 8,018 7,999 Union National Capital Trust II (1) November 23, 2034 3-month SOFR plus 2.00 % 3,000 2,816 2,796 MFBC Statutory Trust I (1) September 15, 2035 3-month SOFR plus 1.70 % 5,000 3,865 3,788 Universal Preferred Trust (1) October 7, 2035 3-month SOFR plus 1.69 % 5,000 3,857 3,778 $ 128,875 129,769 129,574 (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 nine month periods ended September 30, 2024 and September 30, 2023 total interest expense paid on trust preferred securities was $ 7 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: 28 Table of Contents • the interest on the debentures to no longer be deductible by the Company for federal income tax purposes; • 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 September 30, 2024, the maximum potential amount of future payments we could be required to make under these non-recourse standby letters of credit was $ 58 million, of which $ 41 million is fully collateralized. At September 30, 2024, we had a liability which represents deferred income of $ 1 million related to the standby letters of credit. In addition, we maintain a $ 20 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 $ 11 million in notional value of credit cards have been issued. These issued credit cards had an outstanding balance of $ 2 million at September 30, 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 is calculated using both the two-class and the treasury stock methods wi th the more dilutive method used to determine diluted EPS. The two-class method was used to determine basic EPS for the three months and nine months ended September 30, 2024 and basic and diluted EPS for the three and nine months ended September 30, 2023, and the treasury stock method was used to determine diluted earnings per share for the three months and nine months ended September 30, 2024. The following table sets forth the computation of basic and diluted EPS (in thousands, except share data and per share amounts): 29 Table of Contents Quarter ended September 30, Nine months ended September 30, 2024 2023 2024 2023 Numerator for earnings per share - Basic and Diluted: Net income - treasury stock method - Basic and Diluted $ 33,618 39,220 67,528 105,943 Less: Dividends and undistributed earnings allocated to participating securities 43 99 86 267 Net income available to common shareholders - two class method - Basic and Diluted $ 33,575 39,121 67,442 105,676 Denominator for earnings per share - treasury stock method - Basic and Diluted Weighted average common shares outstanding - Basic 127,206,579 126,767,507 127,015,478 126,629,786 Add: Potentially dilutive shares 507,932 234,139 553,536 373,605 Denominator for treasury stock method - Diluted 127,714,511 127,001,646 127,569,014 127,003,391 Denominator for earnings per share - two class method - Basic and Diluted: Weighted average common shares outstanding - Basic 127,206,579 126,767,507 127,015,478 126,629,786 Add: Average participating shares outstanding 162,943 320,177 162,943 320,177 Denominator for two class method - Diluted 127,369,522 127,087,684 127,178,421 126,949,963 Basic earnings per share $ 0.26 0.31 0.53 0.83 Diluted earnings per share $ 0.26 0.31 0.53 0.83 Anti-dilutive awards (1) 2,195 2,832 2,369 2,832 (1) Reflects the total number of shares related to outstanding options that have been excluded from the computation of diluted earnings per share because the impact would have been anti-dilutive. 30 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 September 30, 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 Nine months ended September 30, Pension benefits Other post-retirement benefits 2024 2023 2024 2023 Service cost $ 4,275 4,680 — — Interest cost 6,615 6,735 45 21 Expected return on plan assets ( 11,328 ) ( 10,437 ) — — Amortization of prior service cost ( 1,689 ) ( 1,692 ) — — Amortization of the net loss 54 60 30 30 Net periodic cost $ ( 2,073 ) ( 654 ) 75 51 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. 31 Table of Contents 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. 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. 32 Table of Contents Subordinated Debentures The fair value of our subordinated debentures is calculated using the discounted cash flows at rates observable for other similarly traded liabilities. 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 September 30, 2024 and December 31, 2023, there was no significant unrealized appreciation or depreciation on these financial instruments. 33 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 September 30, 2024 (in thousands): Carrying amount Estimated fair value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 226,883 226,883 226,883 — — Securities available-for-sale 1,111,868 1,111,868 — 1,111,868 — Securities held-to-maturity 766,772 672,641 — 672,641 — Loans receivable, net 11,169,375 10,494,023 — — 10,494,023 Loans held-for-sale 9,370 9,370 — — 9,370 Accrued interest receivable 46,678 46,678 46,678 — — Interest rate lock commitments 673 673 — — 673 Forward commitments 115 115 — 115 — Foreign exchange swaps 6 6 — 6 — Interest rate swaps designated as hedging instruments 90 90 — 90 — Interest rate swaps not designated as hedging instruments 31,761 31,761 — 31,761 — FHLB stock 21,223 21,223 — — — Total financial assets $ 13,384,814 12,615,331 273,561 1,816,481 10,504,066 Financial liabilities: Savings and checking deposits $ 9,361,030 9,361,030 9,361,030 — — Time deposits 2,710,049 2,492,832 — — 2,492,832 Borrowed funds 204,374 194,912 194,912 — — Subordinated debt 114,451 107,555 — 107,555 — Junior subordinated debentures 129,769 120,054 — — 120,054 Foreign exchange swaps 173 173 — 173 — Interest rate swaps designated as hedging instruments 2,085 2,085 — 2,085 — Interest rate swaps not designated as hedging instruments 31,924 31,924 — 31,924 — Risk participation agreements 49 49 — 49 — Accrued interest payable 15,125 15,125 15,125 — — Total financial liabilities $ 12,569,029 12,325,739 9,571,067 141,786 2,612,886 34 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 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 September 30, 2024 and December 31, 2023. 35 Table of Contents The following table represents assets and liabilities measured at fair value on a recurring basis at September 30, 2024 (in thousands): Level 1 Level 2 Level 3 Total assets at fair value Debt securities: U.S. government and agencies $ — 37,795 — 37,795 Government-sponsored enterprises — 132 — 132 States and political subdivisions — 61,085 — 61,085 Corporate — 24,836 — 24,836 Total debt securities — 123,848 — 123,848 Mortgage-backed securities: GNMA — 55,677 — 55,677 FNMA — 65,222 — 65,222 FHLMC — 95,913 — 95,913 Non-agency — 4 — 4 Collateralized mortgage obligations: GNMA — 558,360 — 558,360 FNMA — 78,304 — 78,304 FHLMC — 134,540 — 134,540 Total mortgage-backed securities — 988,020 — 988,020 Interest rate lock commitments — — 673 673 Forward commitments — 115 — 115 Foreign exchange swaps — 6 — 6 Interest rate swaps designated as hedging instruments — 90 — 90 Interest rate swaps not designated as hedging instruments — 31,761 — 31,761 Total assets $ — 1,143,840 673 1,144,513 Foreign exchange swaps $ — 173 — 173 Interest rate swaps designated as hedging instruments — 2,085 — 2,085 Interest rate swaps not designated as hedging instruments — 31,924 — 31,924 Risk participation agreements — 49 — 49 Total liabilities $ — 34,231 — 34,231 36 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 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 September 30, For the nine months ended September 30, 2024 2023 2024 2023 Beginning balance, $ 791 761 641 559 Interest rate lock commitments: Net activity ( 118 ) ( 97 ) 32 105 Ending balance $ 673 664 673 664 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. 37 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 September 30, 2024 (in thousands): Level 1 Level 2 Level 3 Total assets at fair value Loans individually assessed $ — — 14,949 14,949 Mortgage servicing rights — — 23 23 Real estate owned, net — — 76 76 Total assets $ — — 15,048 15,048 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 September 30, 2024 (in thousands): Fair value Valuation techniques Significant unobservable inputs Range (weighted average) Loans individually assessed $ 14,949 Appraisal value (1) Estimated cost to sell 10 % Mortgage servicing rights 23 Discounted cash flow Annual service cost $ 88 Prepayment rate 6.5 % to 18.7 % ( 11.0 %) Expected life (months) 50.3 to 101.9 ( 70.5 ) Option adjusted spread 725 basis points Forward yield curve 5.31 % to 4.50 % Real estate owned, net 76 Appraisal value (1) Estimated cost to sell 10 % Loans held for sale 9,370 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. 38 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. 39 Table of Contents The following table presents information regarding our derivative financial instruments at the dates indicated (in thousands): Asset derivatives Liability derivatives Notional amount Fair value Notional amount Fair value At September 30, 2024 Derivatives designated as hedging instruments: Interest rate swap agreements $ 50,000 90 125,000 2,085 Derivatives not designated as hedging instruments: Interest rate swap agreements 748,903 31,761 748,903 31,924 Foreign exchange swap agreements 2,987 6 119 173 Interest rate lock commitments 27,536 673 — — Forward commitments 4,514 115 — — Risk participation agreements — — 137,126 49 Total Derivatives $ 833,940 32,645 1,011,148 34,231 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 September 30, For the nine months ended September 30, 2024 2023 2024 2023 Hedging derivatives: Decrease in interest expense $ 732 627 2,198 831 Non-hedging swap derivatives: (Decrease)/increase in other income ( 221 ) 203 ( 45 ) ( 127 ) (Decrease)/increase in mortgage banking income ( 73 ) ( 221 ) 135 ( 46 ) The following table presents information regarding our derivative financial instruments designated as hedging for the quarter ended September 30, 2024 (dollars 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 3.51 % $ ( 462 ) 5/11/2027 31 Issued May 12, 2023 25,000 3.56 % ( 450 ) 5/12/2028 43 Issued May 19, 2023 25,000 3.86 % ( 377 ) 11/19/2027 38 Issued May 31, 2023 25,000 4.04 % ( 326 ) 11/30/2026 26 Issued July 26, 2023 25,000 4.24 % ( 271 ) 7/26/2028 46 Issued July 31, 2023 25,000 4.27 % ( 249 ) 1/31/2028 40 Issued August 9, 2023 25,000 4.31 % ( 254 ) 8/9/2027 34 Total $ 175,000 $ ( 2,389 ) 40 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 September 30, 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 September 30, 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 June 30, 2024 $ ( 132,959 ) 2,110 765 ( 130,084 ) Other comprehensive/(loss) income before reclassification adjustments (1) (3) 27,947 ( 3,654 ) — 24,293 Amounts reclassified from accumulated other comprehensive income (2) (4) — — ( 387 ) ( 387 ) Net other comprehensive income/(loss) 27,947 ( 3,654 ) ( 387 ) 23,906 Balance as of September 30, 2024 $ ( 105,012 ) ( 1,544 ) 378 ( 106,178 ) For the quarter ended September 30, 2023 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 June 30, 2023 $ ( 163,272 ) 1,737 ( 7,716 ) ( 169,251 ) Other comprehensive (loss)/income before reclassification adjustments (5) (7) ( 29,715 ) 1,825 — ( 27,890 ) Amounts reclassified from accumulated other comprehensive income (6) (8) — — ( 382 ) ( 382 ) Net other comprehensive income/(loss) ( 29,715 ) 1,825 ( 382 ) ( 28,272 ) Balance as of September 30, 2023 $ ( 192,987 ) 3,562 ( 8,098 ) ( 197,523 ) (1) Consists of unrealized holding gains, net of tax of ($ 8,980 ) . (2) Consists of realized losses, net of tax of $ 0 . (3) Change in fair value of interest rate swaps, net of tax $ 1,068 . (4) Consists of realized gains, net of tax of $ 148 . (5) Consists of unrealized holding losses, net of tax of $ 9,140 . (6) Consists of realized losses, net of tax of $ 0 . (7) Change in fair value of interest rate swaps, net of tax ($ 533 ) . (8) Consists of realized gains, net of tax of $ 152 . 41 Table of Contents For the nine months ended September 30, 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 income/(loss) before reclassification adjustments (1) (3) 18,858 ( 1,170 ) — 17,688 Amounts reclassified from accumulated other comprehensive income (2) (4) 26,789 — ( 1,163 ) 25,626 Net other comprehensive income/(loss) 45,647 ( 1,170 ) ( 1,163 ) 43,314 Balance as of September 30, 2024 $ ( 105,012 ) ( 1,544 ) 378 ( 106,178 ) For the nine months ended September 30, 2023 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, 2022 $ ( 164,206 ) — ( 6,952 ) ( 171,158 ) Other comprehensive loss before reclassification adjustments (5) (7) ( 34,417 ) 3,562 — ( 30,855 ) Amounts reclassified from accumulated other comprehensive income (6) (8) 5,636 — ( 1,146 ) 4,490 Net other comprehensive loss ( 28,781 ) 3,562 ( 1,146 ) ( 26,365 ) Balance as of September 30, 2023 $ ( 192,987 ) 3,562 ( 8,098 ) ( 197,523 ) (1) Consists of unrealized holding gains, net of tax of ($ 7,054 ) . (2) Consists of realized losses, net of tax of ($ 7,706 ) . (3) Change in fair value of interest rate swaps, net of tax $ 342 . (4) Consists of realized gains, net of tax of $ 442 . (5) Consists of unrealized holding losses, net of tax $ 9,603 . (6) Consists of realized losses, net of tax ($ 1,731 ) . (7) Change in fair value of interest rate swaps, net of tax ($ 1,041 ) . (8) Consists of realized gains, net of tax of $ 456 . 42 Table of Contents