What changed in this filing

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Item 1. Business

2025-02-25 compared with 2024-02-23 · 337 added, 256 removed, 348 unchanged (63% of the section changed)

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The telephone number for these addresses is (814) 726-2140.

The Company’s website (www.northwest.com) contains a direct link to Northwest Bancshares, Inc.’s filings with the Securities and Exchange Commission, including copies of annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these filings, if any.

The Company’s website (www.northwest.com) contains a direct link to Northwest Bancshares, Inc.’s filings with the SEC, including copies of annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these filings, if any.

Information on our website shall not be considered a part of this report.

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Northwest Bank is a Pennsylvania-chartered savings bank headquartered in Warren, Pennsylvania, which is located in northwestern Pennsylvania.

Northwest Bank is a community-oriented financial institution offering personal and business banking solutions, investment management and trust services.

Northwest Bank is a community-oriented financial institution offering personal and commercial banking solutions, investment management and trust services.

Northwest Bank’s mutual savings bank predecessor was founded in 1896.

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Northwest Bank’s principal executive office is located at 100 Liberty Street, Warren, Pennsylvania 16365, and the telephone number at that address is (814) 726-2140.

Agreement to Acquire Penns Woods

On December 16, 2024, the Company and Penns Woods Bancorp, Inc., a Pennsylvania corporation (“Penns Woods”), entered into an Agreement and Plan of Merger (the “Merger Agreement”).

The Merger Agreement provides for a business combination whereby Penns Woods will merge with and into the Company (the “Merger”), with the Company as the surviving corporation in the merger.

Immediately after the effective time of the Merger (the “Effective Time”), or at such later time as the Company determines, Penns Woods’ wholly-owned subsidiary banks, Luzerne Bank, a Pennsylvania-chartered state bank, and Jersey Shore State Bank, a Pennsylvania-chartered state bank, will merge with and into Northwest Bank, with Northwest Bank as the surviving bank in the subsidiary bank mergers.

The boards of directors of Northwest and Penns Woods have unanimously approved entry into the Merger Agreement and the transactions contemplated thereby.

Under the terms and subject to the conditions of the Merger Agreement, at the Effective Time, each share of Penns Woods’ common stock, $5.55 par value, issued and outstanding immediately prior to the Effective Time (except for Treasury Shares (as provided for in the Merger Agreement)), will be converted, in accordance with the procedures set forth in the Merger Agreement, into a right to receive 2.385 shares of common stock, $0.01 par value, of the Company.

Under the terms and subject to the conditions of the Merger Agreement, the Company agreed to fill the current vacancy on its Board of Directors (or otherwise expand its Board of Directors by one director and fill the resulting vacancy) with Penns Woods director, Richard A.

Grafmyre, effective at the Effective Time and subject to the Company’s standard corporate governance practices and standard director evaluation process.

The Merger is expected to close in the third quarter of 2025, pending satisfaction of various closing conditions, including:

(i) the receipt of Penns Woods’ shareholders adoption and approvals;

(ii) authorization for listing on the Nasdaq Stock Market LLC of the shares of common stock of the Company to be issued in the Merger;

(iii) the receipt of required regulatory approvals, including the approval of the Federal Reserve Board and the Pennsylvania Department of Banking and Securities;

(iv) effectiveness of the registration statement on Form S-4 for the shares of common stock of the Company to be issued in the Merger;

(v) the absence of any order, injunction or other legal restraint preventing or making illegal the completion of the Merger or any of the other transactions contemplated by the Merger Agreement.

Market Area and Competition

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The Pennsylvania markets in which we operate our retail branches contain approximately half of Pennsylvania’s population and a similar percentage of households.

These markets have experienced a 1.5% decrease in population between 2020 and 2024.

As of December 31, 2023, the market’s average median household income has increased over the last year by 6.7%, to $67,574, compared to the national median income level of $75,874.

The household income growth rate in Pennsylvania of 10.3%, is projected to be slightly higher than the national average growth rates during the next five years of 10.1%.

T hese markets have experienced a 2.1% decrease in population between 2020 and 2024.

As of December 31, 2024, the market’s average median household income has decreased over the last year by 2.1%, to $66,127, compared to the national median income level of $78,770.

The household income growth rate in Pennsylvania of 7.8%, is projected to be slightly lower than the national average growth rates during the next five years of 8.8%.

As of December 31, 2024, the market’s unemployment rate was 3.3%, slightly lower than both the Commonwealth of Pennsylvania rate of 3.6% and the national average of 4.1%.

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Our New York market area has a total population of approximately 2.0 million and total households of approximately 864,000 as of December 31, 2024.

This area has experienced an decrease in population between 2020 and 2024, of 0.7%.

This area has experienced a decrease in population between 2020 and 2024, of 1.5%.

The average median household income in this market increased by 5.6% over the last year to $69,253 as of December 31, 2024, compared to the national median income level of $78,770.

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Northeastern Ohio Market Area .

Our retail branch network of 11 community banking offices includes two counties in northeastern Ohio, including the Cleveland metro area.

Our retail branch network of 11 community banking offices in Ohio includes two counties in northeastern Ohio, including the Cleveland metro area.

The major employment sectors in this market are similar to the contiguous market in western Pennsylvania.

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Indiana Market Area .

Our retail branch network of 20 community banking offices includes eight counties in Indiana.

Our retail branch network of 20 community banking offices in Indiana includes nine counties in Indiana.

This market has a diverse economy driven by healthcare and education industries, service businesses, technology companies and small manufacturing operations.

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The median household income for our Indiana market increased 2.6% over the last year to $62,248 as of December 31, 2024, compared to the national median income level of $78,770.

As of December 31, 2023, the unemployment rate for our Indiana market was 3.7%, the same as the national average.

As of December 31, 2024, the unemployment rate for our Indiana market was 4.5%, compared to the national average of 4.1%.

As of September 30, 2024, the House Price Index for the last four quarters in our Indiana market area increased by 6.4%, compared to an increase in the national average of 4.3%.

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Our adjustable-rate residential mortgage loans offer initial interest rate adjustment periods of five, seven, and ten years, terms up to 30 years and adjustments based on changes in designated market indices.

Regulations limit the amount that a bank may lend relative to appraised values of real estate securing the loans, as determined by an appraisal at the time of loan origination.

Such regulations permit a maximum loan-to-value of 95% for residential properties and 80% for all other real estate secured loans.

We generally limit the maximum loan-to-value on both fixed-rate and adjustable-rate residential mortgage loans without private mortgage insurance, to 80% of the lesser of appraised values or purchase prices of real estate serving as collateral for our mortgage loans.

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We also require flood insurance for loans secured by properties located within special flood hazard areas.

Included in our $3.419 billion portfolio of residential mortgage loans as of December 31, 2023 are construction loans of $26.6 million, or 0.2% of our gross loan portfolio.

We offer fixed-rate and adjustable-rate residential construction-to-permanent loans primarily for the construction of owner-occupied one-to four-family residences in our market area to builders or owners who have a contract for construction.

Included in our $3.2 billion portfolio of residential mortgage loans as of December 31, 2024 are construction loans of $7 million, or 0.

2% of our gros s loan portfolio.

We offer fixed-rate and adjustable-rate residential construction-to-permanent loans primarily for the construction of owner-occupied one-to-four-family residences in our market area to owners who have a contract for construction.

Construction loans are originated with terms of up to 30 years with an allowance of up to one year for construction.

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At the end of the construction period, repayment terms convert to fully amortizing payments, with both principal and interest due monthly.

Construction lending generally involves a greater degree of credit risk than permanent residential mortgage lending, as repayment of

construction loans is often dependent upon the successful completion of construction projects.

Construction lending generally involves a greater degree of credit risk than permanent residential mortgage lending, as repayment of construction loans is often dependent upon the successful completion of construction projects.

Construction delays or the inability of borrowers to sell properties once construction is completed may impair borrowers’ ability to repay loans.

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Home Equity Loans and Lines of Credit .

Generally, our home equity loans are secured by the borrower’s principal residence with a maximum loan-to-value ratio, including the principal balances of both the first and second mortgage loans, of 95% or less.

Generally, our home equity loans are secured by the borrower’s principal residence with a maximum loan-to-value ratio, including the principal balances of both the first and subordinate mortgage loans, of 95% or less.

We generally underwrite home equity loans and lines of credit in a manner similar to our underwriting of residential mortgage loans.

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At December 31, 2024, a significant portion of our multi-family commercial real estate and commercial real estate loans were secured by properties located within our market area.

Our largest commercial relationship with an aggregate total exposure of $118.9 million as of December 31, 2023, is comprised of multi-family residential, commercial office, hotel, retail buildings, and student housing, the largest of which is $33.5 million of the total exposure secured by retail buildings.

This relationship is also our largest commercial real estate loan relationship as of December 31, 2023, of which $117.2 million is attributed to commercial real estate loans.

Our largest commercial loan relationship, including commercial real estate, had an aggregate total exposure of $114.1 million as of December 31, 2024.

The largest component of this exposure is attributed to loans secured by student housing, which comprised $53.3 million of exposure at December 31, 2024, which additional loans secured by multi-family residential, commercial office, hotel and retail buildings.

This relationship is also our largest commercial real estate loan relationship as of December 31, 2024, with $112.5 million of the exposure attributed to commercial real estate loans.

All of the underlying loans were performing in accordance with their terms as of December 31, 2024.

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We offer commercial loans to finance various activities in our market area, some of which are secured in part by additional real estate collateral.

At December 31, 2023, our largest commercial loan relationship had an aggregate total exposure of $67.4 million, and operates in the internet, cable and phone space.

At December 31, 2024, our largest commercial loan relationship had an aggregate total exposure of

$65.0 million, and operates in the manufacturing space.

These loans were performing in accordance with their agreed upon terms as of December 31, 2024.

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A loan underwriter checks the loan document file for accuracy and completeness and verifies the information provided.

For our personal loans, including residential mortgage loans, home equity loans and lines of credit, automobile loans, credit cards and other unsecured loans, we have implemented a credit approval process based on a laddered individual loan authority system.

For our personal loans, including residential mortgage loans, home equity loans and lines of credit, automobile loans and credit cards and other unsecured loans, we have implemented a credit approval process based on a laddered individual loan authority system.

Real estate secured loans are underwritten centrally by our underwriting team.

Non-real estate loans are underwritten by both local loan officers or a centralized underwriting team who are granted various levels of authority based on their lending experience and expertise.

Non-real estate loans are underwritten by local loan officers and/or a centralized underwriting team who are granted various levels of authority based on their lending experience and expertise.

These authority levels are reviewed by the Credit Committee on at least an annual basis.

For commercial loans, aggregate credit exposures over $1.0 million are underwritten by Credit Administration.

Our commercial loan policy assigns individual lending limits for our various commercial loan officers and dual authority consisting of an individual from Commercial Lending and Credit Administration.

For commercial loans, aggregate credit exposures over $1.0 million are underwritten by Commercial Credit Management.

Our commercial loan policy assigns individual lending limits for our various commercial credit underwriters and dual authority consisting of an individual from Commercial Credit Management and Credit Risk Officers.

Lending authorities are established by the Credit Committee.

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The Credit Committee meets monthly to review the assigned lending limits and to monitor our lending policies, loan activity, economic conditions, and concentrations of credit.

Our general policy is to make no loans, either individually or in the aggregate to one borrower or single source of repayment, in excess of $30.0 million.

The Northwest Credit Committee has established a policy to make no loans, either individually or in the aggregate to one borrower or single source of repayment (the “ Total Credit Exposure Limit”), in excess of $30.0 million.

For loans originated and managed within the Corporate Finance portfolio, the Total Credit Exposure limit is increased to $50.0 million for borrowers with a strong credit profile and a risk rating of 3 or better.

The Aggregate Credit Exposure limit is $100.0 million.

The Aggregate Credit Exposure, which represents total relationship exposure which may include multiple distinct borrowers, limit is $100.0 million.

Criticized/classified loans exceeding $5.0 million or unusual loan requests are reviewed with the Risk Management Committee of the Board of Directors at each quarterly meeting.

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Loans-to-One Borrower .

As of December 31, 2023, the largest aggregate amount loaned to one borrower, or related borrowers, totaled $118.9 million in exposure and was secured by student housing, retail space, office space and commercial development.

Our second largest lending relationship totaled $69.1 million in exposure and was secured by student housing, medical space, senior housing, office space, industrial, aerospace, and transportation engineering and retail space.

Our third largest commercial relationship totaled $67.8 million in exposure and was secured by a hotel, retail space, office space, multi-family, a charter school, self-storage, and a restaurant.

Our fourth largest commercial relationship totaled $67.4 million in exposure and was secured by accounts receivable, information systems, property, and equipment.

Our fifth largest commercial relationship totaled $65.0 million in exposure and was secured by accounts receivable, inventory, manufacturing property and equipment.

As of December 31, 2024, the largest aggregate amount loaned to one borrower, or related borrowers, totaled $114.1 million in exposure and was secured by student housing, multi-family residential, commercial office, hotel, and retail

Our second largest lending relationship totaled $65.8 million in exposure and was secured by office space, and medical facilities.

Our third largest commercial relationship totaled $65.0 million in exposure and was secured by business assets.

Our fourth largest commercial relationship totaled $60.0 million in exposure and was secured by non-marketable securities.

Our fifth largest commercial relationship totaled $58.6 million in exposure and was secured by a nursing home.

All of these loans were performing in accordance with their terms at December 31, 2024.

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The policy dictates that investment decisions give consideration to the safety of principal, liquidity requirements and potential returns.

All purchase and sale transactions are reported to the Board of Directors on a monthly basis.

Our investment policy does not permit the purchase of complex securities and derivatives as defined in federal banking regulations and other high-risk securities, nor does it permit additional investments in pooled trust preferred securities, or single issuer trust preferred securities.

Our investment policy does permit the purchase of complex securities, derivatives and other high-risk securities as long as the investment has a pre-purchase sensitivity analysis completed and the results are within our our established range.

The policy does not permit additional investments in pooled trust preferred securities, or single issuer trust preferred securities.

At the time of purchase, we designate a security as either held-to-maturity or available-for-sale based upon our ability and intentions.

Securities available-for-sale are carried at fair value and securities held-to-maturity are carried at amortized cost.

On a quarterly basis, we measure expected credit losses on held-to-maturity debt securities on a collective basis by m ajor security type.

On a quarterly basis, we measure expected credit losses on held-to-maturity debt securities on a collective basis by major security type.

Available-for-sale debt securities in an unrealized loss position are reviewed for impairment at least quarterly.

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The fair values of our securities are based on published or securities dealers’ market values, when available.

See Note 4 to the Consolidated Financial Stat ements for a detailed analysis and description of our investment portfolio and valuation techniques.

See Note 4 to the Consolidated Financial Statements for a detailed analysis and description of our investment portfolio and valuation techniques.

We purchase debentures and mortgage-backed securities that generally are issued by the Federal Home Loan Bank ( “ FHLB”), Fannie Mae ( “ FNMA”), Freddie Mac ( “ FHLMC”) or Ginnie Mae ( “ GNMA”).

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While we accept deposits of $250,000 or more, we do not offer premium rates for such deposits.

We accept brokered deposits through the CDARS program, but generally do not solicit funds outside our market area.

As of December 31, 2023, we had deposits through the CDARS program with an aggregate balance of $200,000.

In addition, we purchased $483.9 million of brokered certificates of deposit in 2023.

In addition, we purchased $200.0 million of brokered certificates of deposit as of December 31, 2024.

Deposit account terms vary according to the minimum balance required, the period of time during which the funds must remain on deposit, and the interest rate, among other factors.

We regularly execute changes in our deposit rates based upon general market interest rates, competition, and liquidity requirements.

As of December 31, 2023, $1.835 billion, or 15.32%, of total deposits were uninsured as they exceeded the FDIC ’ s $250,000 limit.

As of December 31, 2024, $1.9 billion, or 16%, of total deposits were uninsured as they exceeded the FDIC’s $250,000 limit of deposit insurance per depositor, per FDIC-insured bank, per account ownership category.

We may utilize borrowings to supplement our supply of lendable funds and to meet deposit withdrawal requirements.

Borrowings from the FHLB of Pittsburgh typically are collateralized by a portion of our real estate loans.

In addition to the FHLB, we have borrowing facilities with the Federal Reserve Bank, two correspondent banks and we borrow funds, in the form of corporate repurchase agreements, from municipalities, corporations and school districts.

In addition to the FHLB, we have borrowing facilities with the Federal Reserve Bank of Cleveland and two correspondent banks.

We also borrow funds, in the form of corporate repurchase agreements, from municipalities, corporations and school districts.

Northwest Bank is a member of the FHLB of Pittsburgh.

The FHLB functions as a central bank providing credit for Northwest Bank and other member financial institutions.

As a member, Northwest Bank is required to own capital stock in the FHLB of Pittsburgh and is authorized to apply for borrowings on the security of certain of its real estate loans, provided certain standards related to creditworthiness have been met.

creditworthiness have been met.

Borrowings are made pursuant to several different programs.

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Risk Management

Our Enterprise Risk Management (ERM) program is designed to ensure that significant risks are identified, measured, monitored and addressed.

Our ERM program reflects our risk appetite, governance, culture and reporting.

We manage enterprise risk using our Board-approved Risk Management Policy, which includes Board-level oversight, risk management committees, and a dedicated risk management team led by our Chief Risk Officer (CRO).

Our Board determines the level of risk we are willing to accept in pursuit of our objectives, through the ERM program and well-defined risk appetite statements developed thereunder.

We utilize the “three lines of defense” risk management model to assign roles, responsibilities and accountabilities for taking and managing risk.

Board and Board Committees.

Our Board of Directors, as a whole and through its committees, maintains responsibilities for the oversight of risk management, including monitoring the “tone at the top”, our risk appetite, our risk culture and overseeing emerging and strategic risks.

While our Board’s Risk Committee has primary responsibility for oversight of enterprise risk management, the Audit, Compensation, Innovation & Technology, Trust and Nominating & Corporate Governance Committees also oversee risks within their respective areas of responsibilities.

Each of these Board Committees consists entirely of independent directors and provides regular reports to the full Board regarding matters reviewed at their Committee meetings.

Our Board of Directors, as a whole and through its committees, maintains responsibility for the oversight of risk management, including monitoring the “tone at the top”, adherence to our risk appetite, our risk culture and overseeing emerging and strategic risks.

Our Board’s Risk Management Committee (BRMC) has primary responsibility for oversight of enterprise risk management.

The BRMC consists entirely of independent directors and provides a regular report to the full Board regarding matters reviewed at it’s Committee meetings.

The Bank has a comprehensive Enterprise Risk Management Policy, approved by the Board of Directors.

Risk Management Roles and Responsibilities.

In addition to our Board and Board Committees, responsibility for risk management also flows to individuals and entities throughout the Company, including various management committees and executive management.

Our Enterprise Risk Management (“ERM”) Framework defines our “three lines of defense” risk management model, which includes the following:

In addition to our Board and Board Committees, responsibility for risk management also flows to other individuals and entities throughout the Company, including various management committees and executive management.

Our Enterprise Risk Management Policy defines our “three lines of defense” risk management model, which includes the following:

• The “first line of defense” is comprised of the business areas that engage in activities that generate revenue or provide operational support or services that introduce risk to the Company.

As the business owner, the first line of defense is responsible for, among other things, identifying, owning, managing and controlling key risks associated with their activities, timely addressing issues and remediation, and implementing processes and procedures to strengthen the risk and control environment.

The first line of defense is responsible for, among other things, identifying, owning, managing and controlling key risks associated with their activities, timely addressing issues and remediation, and implementing processes and procedures to strengthen the risk and control environment.

The first line of defense identifies and manages key risk indicators and risks and controls consistent with the Company’s risk appetite.

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• The “second line of defense” includes an independent risk management team charged with oversight and monitoring of risk within the business.

The second line of defense is responsible for, among other things, formulating our ERM Framework and related policies and procedures, challenging the first line of defense and identifying, monitoring and reporting on aggregate risks of the business and support functions.

Our risk management team, which is led by our Chief Risk Officer (“CRO”) and includes compliance, provides oversight of our risk profile and is responsible for maintaining a compliance program that includes compliance risk assessment, policy development, testing and reporting activities.

The second line of defense is responsible for, among other things, formulating and overseeing our Enterprise Risk Management Policy and related policies and procedures, effectively challenging the first line of defense and identifying, measuring, monitoring and reporting on aggregate risks of the business and support functions.

Our risk management team, which is led by our CRO, provides oversight of our risk profile and is responsible for maintaining a compliance program that includes compliance risk assessments, policy development, testing and reporting activities.

The CRO manages our risk management team and is responsible for establishing and implementing standards for the identification, management, measurement, monitoring and reporting of risk on an enterprise-wide basis.

The CRO is responsible for developing an appropriate risk appetite with corresponding limits that aligns with supervisory expectations and proposing our risk appetite to the Board of Directors.

The CRO regularly reports to the Risk Committee as well as the Bank’s Enterprise Risk Management Committee (“ERMC”) on risk management matters.

The CRO regularly reports to the Board Risk Management Committee as well as the Bank’s Enterprise Risk Management Committee (“ERMC”) on risk management matters.

• The “third line of defense” is comprised of the Internal Audit organization.

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Management Committees.

The ERMC is the highest-level management committee at the Bank to oversee risks and is responsible for risk governance, risk oversight and making recommendations on the Banks’ risk appetite.

The ERMC is the highest-management-level committee at the Bank to oversee risks and is responsible for risk governance and oversight and makes recommendations on the Bank’s risk appetite.

The ERMC monitors compliance with limits and related escalation requirements and oversees implementation of risk policies.

In addition to the ERMC, we maintain the following risk management committees to oversee the risks listed below:

Credit Committee;

In addition to the ERMC, we maintain the following management-level committees to oversee our risk categories:

Compliance Risk Management Committee;

Operational Risk Management Committee;

Credit Committee;

Model Risk Management Committee;

Operational Risk Management Committee;

and the Asset/Liability Committee.

Each of these Committees is responsible for one or more of the Bank’s seven risk categories, which are described in greater detail below under the heading “Risk Categories”.

Each of these Committees is responsible for one or more of the Bank’s eight risk categories, which are described in greater detail below under the heading “Risk Categories”.

For its risk category(ies) of responsibility, each Committee provides risk governance, risk oversight and monitoring.

Each Committee reviews key risk exposures, trends and significant compliance matters, and provides guidance on steps to monitor, control and escalate significant risks.

We include the risk information provided by the ERMC, and these management risk committees, along with additional risk information that is identified at the holding company level in our determination and assessment of the risks that are presented to and discussed with our Board and Board Committees.

We include the risk information provided by the ERMC, and these management-level risk committees, along with additional risk information that is identified at the holding company level in our determination and assessment of the risks that are presented to and discussed with our Board and Board Committees.

Risk Categories.

We have divided risk into the following seven categories:

credit, market, liquidity, operational, compliance, model and reputational risk.

We evaluate the potential impact of a risk event on us (including our subsidiaries) by assessing the customer, partner, financial, reputational, and legal and regulatory impacts.

Credit Risk is the risk arising from an obligor’s failure to meet the terms of any contract or otherwise perform as agreed.

We evaluate the potential impact of a risk event on us by assessing the customer, partner, financial, reputational, and legal and regulatory impacts and have divided risk into the following categories.

Compliance Risk.

Risk arising from violations of consumer protection laws and/or or regulations, and/or nonconformance with policies and procedures.

This risk exposes Northwest to regulatory enforcement actions, fines, civil money penalties, customer reimbursement, and/or statutory or punitive damages.

This can further result in diminished reputation, limited business opportunities, and/or merger and acquisition restrictions.

Our Compliance organization is responsible for establishing and maintaining our Compliance Management System.

We seek to manage and mitigate compliance risk by assessing, controlling, monitoring, measuring and reporting the legal and regulatory risks to which we are exposed.

The Compliance Risk Management Committee, chaired by the Chief Compliance Officer, oversees the implementation and execution of the Compliance Management System and monitors compliance exposures to manage compliance risks.

Risk arising from an obligor’s failure to meet the terms of any contract or otherwise perform as agreed.

Credit Risk is found in all activities in which settlement or repayment depends on counterparty, issuer, or borrower performance.

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Our credit risk relates to the risk that our borrowers will not repay their loan balances.

To minimize our risk of loan write-offs, we have developed comprehensive policies and procedures outlining our underwriting guidelines across all loan types.

To minimize our risk of loan write-offs, we have developed policies and procedures outlining our underwriting guidelines across all loan types.

The loan policies contain guidance and establish requirements specific to loan types for each line of business.

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Credit risk is overseen and monitored by the Credit Committee.

Market Risk is the risk arising from changes in the financial or economic environment, including movements in interest rates.

Interest rate risk results from:

• differences in the timing of interest rate changes related to the Bank’s assets and liabilities (repricing risk);

• changing rate relationships among different yield curves affecting an organization’s activities (basis risk);

• changing rate relationships across the spectrum of maturities (yield curve risk);

• interest-related options embedded in certain products (optionality risk).

Risk of financial loss arising from adverse changes in markets, primarily in interest rates.

Movements in interest rates have the potential to adversely affect net interest income and the market value of assets and liabilities.

Our principal market risk exposures arise from volatility in interest rates and their impact on earnings and capital.

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The interest rate sensitivity analysis calculates the impact on net interest income from instantaneous and sustained increases or decreases in market interest rates.

Due to the mix of fixed and floating

rate assets and liabilities on our Consolidated Balance Sheet as of December 31, 2023, a hypothetical instantaneous 100 basis point increase or decrease in interest rates would have an immaterial impact on our net interest income results in the first year.

Actual changes in our net interest income will depend on many factors, and therefore may differ from our estimated risk to changes in interest rates.

The Asset & Liability Committee assists the Bank’s Board of Directors and Bank Management in overseeing, reviewing, and monitoring market risk.

Treasury Risk.

Treasury Risk is the risk arising from either 1) the inappropriate management of liquidity and/or capital, resulting in the Bank’s inability to meet obligations when they come due, whether caused by an inability to access funding sources or manage fluctuations in cash flows;

or 2) adverse or poorly implemented business decisions due to misaligned business goals and strategies, a lack of resources, or poor quality of implementation.

Treasury Risk can also result from an organization’s failure to recognize and address changes in market conditions or levels of systemic risk.

Operational Risk.

Operational Risk is the risk arising from failed internal processes, people, and systems or from adverse external events.

Operational losses result from internal fraud;

external fraud;

business disruption and systems failures;

damage to physical assets;

failure to secure confidential data;

inadequate or inappropriate employment practices and workplace safety;

improper design of new products or services;

and failures in execution, delivery, and process management.

Operational Risk is inherent in all business activities and can impact us through direct or indirect financial loss, brand damage, customer dissatisfaction, and legal and regulatory penalties.

The Company has implemented a comprehensive operational risk framework that is defined in the Operational Risk Management Policy.

The Operational Risk Management Committee, chaired by our Chief Operational Risk Officer, oversees and monitors operational risk exposures, including escalating issues and recommending policies, procedures and practices to manage operational risks.

Additionally, we maintain an information and cyber security program, which is led by our Chief Information Security Officer and is designed to protect the confidentiality, integrity, and availability of information and information systems from unauthorized access, use, disclosure, disruption, modification, or destruction.

The Program is built upon a foundation of advanced security technology, a well-staffed and highly trained team of experts, and robust operations based on industry best practices recommendations from the National Institute of Standards and Technology (NIST) Cybersecurity Framework, Federal Financial Institutions Examination Council (FFIEC) Guidelines, and Center for Internet Security (CIS) Benchmarks.

This consists of controls designed to identify, protect, detect, respond and recover from information and cyber security incidents.

We continue to invest in enhancements to cyber security capabilities and engage in industry and government forums to promote advancements to the broader financial services cyber security ecosystem.

Compliance Risk.

Compliance Risk is the risk arising from violations of laws or regulations, nonconformance with policies and procedures or ethical standards, or inadequate contractual arrangements.

This risk exposes the Bank to regulatory enforcement actions, civil money penalties, statutory or punitive damages.

Compliance Risk can result in diminished reputation and lessened expansion potential.

Our Compliance organization is responsible for establishing and maintaining our Compliance Risk Management Program.

Pursuant to this Program, we seek to manage and mitigate compliance risk by assessing, controlling, monitoring, measuring and reporting the legal and regulatory risks to which we are exposed.

The Asset/Liability Committee assists the Board of Directors and bank management in overseeing, reviewing, and monitoring market and treasury risk.

Model and Data Risk .

Model and Data Risk is the risk arising from decisions based on incorrect or misused model outputs and reports.

This risk may result from 1) input errors, including inaccurate data;

2) fundamental design errors resulting in inaccurate calculations, valuations, estimates, or forecasts;

Refers to the potential for adverse consequences from business decisions based on incorrect or misused model or tool outputs and reports.

This risk can lead to financial loss, poor business and strategic decision making and reputational damage.

This risk may result from (1) input errors, including inaccurate or unrepresentative data;

(2) design flaws resulting in inaccurate calculations, valuations, estimates, or forecasts;

or (3) incorrect or improper usage or a misunderstanding about a model’s limitations and assumptions.

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Model and Data risk oversight and monitoring is conducted by the Model Risk Management Committee.

Operational Risk .

Risk arising from failed internal processes, people, and systems or from adverse external events.

Operational losses result from internal fraud, external fraud, business disruptions and system failures, damage to physical assets, inadequate or inappropriate employment practices and workplace safety, improper customer products and business practices, and failures in execution, delivery, and process management.

Operational risk is inherent in all business activities and can impact us through direct or indirect financial loss, brand damage, customer dissatisfaction, and legal and regulatory penalties.

We have implemented an operational risk framework that is defined in the Operational Risk Management Policy.

Additionally, we maintain a cybersecurity program, which is led by our Chief Information Security Officer (“CISO”).

For more information, see Item 1C.

Cybersecurity.

Treasury Risk.

Risk arising from the inability to meet payment obligations in full and on time when they become due, whether caused by an inability to access funding sources or manage fluctuations in cash flows.

Our primary Treasury objective is to maintain a liquidity profile that will enable us, even in times of stress or market disruption, to fund our existing assets and meet liabilities in a timely manner and at an acceptable cost.

Policy and risk appetite limits require us to ensure that sufficient liquid assets are available to survive liquidity stresses over a specified period if time.

The Asset/Liability Committee assists the Board of Directors, as well as management, in overseeing, reviewing, and monitoring treasury risk.

Reputational Risk.

Reputational Risk is the risk arising from negative public opinion.

This risk may impair our competitiveness by affecting our ability to establish new relationships or services, or continue servicing existing relationships.

Reputational Risk is inherent in all activities and requires us to exercise caution in dealing with stakeholders, such as customers, counterparties, correspondents, investors, regulators, employees, and the community.

Risk arising from negative public opinion.

This risk may impair competitiveness by affecting the ability to establish new relationships or services or continue servicing existing relationships.

Reputational risk is inherent in all of Northwest’s activities and requires management to exercise an abundance of caution in dealing with stakeholders, including customers, investors, employees, and the community.

Executive management is responsible for considering the Reputational risk implications of business activities and strategies and ensuring the relevant subject matter experts are engaged as needed.

Strategic Risk .

Risk arising from events or business decisions that may prevent Northwest from achieving its strategic objectives.

Examples of strategic risk include adverse business decisions, poor implementation of business decisions, or the inability to adapt to changes in the economic competitive environment.

This risk is a function of a bank’s strategic goals and business strategies.

Subsidiary Activities

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Northwest Bank strategically ceased operating several business lines in prior periods.

Northwest Settlement Agency, LLC (which ceased operations and became inactive during the first quarter of 2023) provided title insurance to borrowers of Northwest Bank and other lenders.

Northwest Settlement Agency, LLC provided title insurance to borrowers of Northwest Bank and other lenders.

At December 31, 2024, Northwest Bank had an equity investment in Northwest Settlement Agency, LLC of $3.7 million.

For the year ended December 31, 2023, Northwest Settlement Agency, LLC had a net loss of $52,000.

Allegheny Services, Inc.

(which ceased operations and became inactive during the first quarter of 2022), was a Delaware investment company that held mortgage loans originated through our wholesale lending operation as well as municipal bonds.

was a Delaware investment company that held mortgage loans originated through our wholesale lending operation as well as municipal bonds.

At December 31, 2024, Northwest Bank had an equity investment in Allegheny Services, Inc.

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At December 31, 2024, Northwest Bank had an equity investment in Northwest Consumer Discount Company of $44.3 million.

Federal regulations require insured institutions to provide 30 days advance notice to the Federal Deposit Insurance Corporation (“FDIC”) before establishing or acquiring a subsidiary or conducting a new activity in a subsidiary.

The insured institution must also provide the FDIC such information as may be required by applicable regulations and must conduct the activity in accordance with the rules and orders of the FDIC.

In addition to other enforcement and supervision powers, the FDIC may determine

after notice and opportunity for a hearing that the continuation of a savings bank’s ownership of or relation to a subsidiary constitutes a serious risk to the safety, soundness or stability of the savings bank, or is inconsistent with the purposes of federal banking laws.

Upon the making of such a determination, the FDIC may order the savings bank to divest the subsidiary or take other actions.

Human Capital Management

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This decrease is a result of our efforts to optimize our retail network.

As a financial institution, approximately 42% of our employee population are employed at our 134 full-service banking offices and eight free-standing drive-through locations across Pennsylvania, New York, Ohio, and Indiana, and approximately 4% are employed at our customer call centers.

As a financial institution, approximately 41% of our employee population are employed at our 130 full-service banking offices and eleven free-standing drive-up locations across Pennsylvania, New York, Ohio, and Indiana, and approximately 3% are employed at our customer call centers.

Our annual turnover rate (voluntary and involuntary) was 29.6% as of December 31, 2024.

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This is done, in part, by recruiting, hiring and retaining employees who share our core values of being an integral part of the communities we serve.

Inclusion and Diversity.

Inclusion and Workplace Environment.

At Northwest Bank, we know that in order to succeed, we must create and maintain an environment where all employees, whatever their background or role, can contribute, innovate and thrive.

We established the Northwest Inclusion Council to foster a workplace where we all feel accepted, safe, seen and heard.

Led by senior advisors and leaders from throughout our company’s footprint, the Inclusion Council is focused on engaging our entire employee population and leveraging their diverse talents and perspectives, most significantly through our newly-formed Employee Resources Groups (ERGs).

We are committed to foster a workplace where we all feel accepted, seen and heard.

One way we have engaged our entire employee population is through our 5 Employee Resource Groups (ERGSs).

This has provided an opportunity to leverage diverse talents and perspectives.

Workforce Health and Safety.

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The committee was established in order to encourage employee involvement and highlight the importance of safety in the workplace.

The COVID-19 pandemic presented an unpredictable and challenging environment across the globe.

Throughout this pandemic, we committed to take every measure and precaution to protect our employees while continuing to serve our customers and being mindful of the fiduciary responsibility we have to our shareholders.

Compensation and Benefits.

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SUPERVISION AND REGULATION

As a bank holding company, we are required to comply with the rules and regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and are also required to file certain reports with and are subject to examination by the Federal Reserve Board.

We are also subject to the rules and regulations of the Securities and Exchange Commission under the federal securities laws.

Northwest Bank is a Pennsylvania-chartered stock savings bank and our deposit accounts are insured up to applicable limits by the FDIC’s Deposit Insurance Fund (the “DIF”).

As a bank holding company, the Company is required to comply with the rules and regulations of the Federal Reserve Board and is also required to file certain reports with, and subject to examination by, the Federal Reserve Board.

Because it has $10 billion or more in total consolidated assets, the Company is subject to additional statutory and regulatory requirements, including enhanced risk management and corporate governance processes and examination and supervision for compliance with federal financial consumer protection laws by the Consumer Financial Protection Bureau (the “CFPB”).

The Company is also subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended (the “Securities Act”) , and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), both as administered by the SEC, as well as the rules of Nasdaq that apply to companies with securities listed on the NASDAQ Global Select Market.

The Company’s sole direct consolidated subsidiary is Northwest Bank.

Northwest Bank is a Pennsylvania-chartered stock savings bank that is not a member of the Federal Reserve System and its deposit accounts are insured up to applicable limits by the FDIC’s Deposit Insurance Fund (the “DIF”).

Northwest Bank is subject to extensive regulation by the Department of Banking and Securities of the Commonwealth of Pennsylvania (the “Department of Banking”), as its chartering agency, and by the FDIC, as its primary federal regulator and the insurer of its deposit accounts.

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Northwest Bank is examined periodically by the Department of Banking and the FDIC to test Northwest Bank’s compliance with various laws and regulations.

This regulation and supervision, as well as federal and state law, establishes a comprehensive framework of activities in which Northwest Bank may engage and is intended primarily for the protection of the DIF and depositors.

The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and with their examination policies, including policies with respect to the classification of assets and the establishment of adequate credit loss reserves for regulatory purposes.

Any change in these laws or regulations, whether by the Department of Banking or the FDIC, could have a material adverse impact on the Company, Northwest Bank and their respective operations.

Additionally, when the consolidated assets of a financial institution and its holding company exceed $10 billion, such as is the case with us, the financial institution becomes subject to additional statutory and regulatory

requirements that will result in additional costs.

This includes enhanced risk management and corporate governance processes, and examination for compliance with federal financial consumer protection laws by the Consumer Financial Protection Bureau (“CFPB”).

Set forth below is a brief description of certain regulatory requirements that are applicable to Northwest Bank and Northwest Bancshares, Inc.

The description below is limited to certain material aspects of the statutes and regulations addressed, and is not intended to be a complete description of such statutes and regulations and their effects on Northwest Bank and Northwest Bancshares, Inc.

This regulation and supervision, as well as federal and state law, establishes a comprehensive framework of activities in which the Company and Northwest Bank may engage and is intended primarily for the protection and benefit of depositors and other customers, the DIF, the U.S.

banking and financial system, and the broader economy, not for the protection or benefit of the Company’s shareholders or non-deposit creditors.

The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and with their examination policies, including policies with respect to the classification of assets, establishment of adequate credit loss reserves for regulatory purposes and risk management and governance.

Any change in these laws or regulations or any heightened supervisory environment, including by the Federal Reserve Board, the Department of Banking, the FDIC or the CFPB, could have a material adverse impact on the Company, Northwest Bank and their respective operations.

The Trump administration is expected to create further changes to the federal regulatory and supervisory framework, the impact of which is difficult to assess.

Changes in our regulatory and supervisory framework may also have a material adverse affect on the Company and Northwest Bank’s business, operations, and earnings.

Set forth below is a brief description of certain regulatory requirements that are applicable to the Company and Northwest Bank.

Federal Bank Holding Company Regulation

As a bank holding company, the Company is subject to regulation under the Bank Holding Company Act, as amended (the “BHCA”), and to regulation, examination and supervision by, and periodic reporting to, the Federal Reserve Board.

The Federal Reserve Board has supervisory and enforcement authority over the Company and any non-bank subsidiaries.

Among other things, this authority permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a risk to Northwest Bank.

Pause on Major Federal Reserve Board Rulemakings

In January 2025, the Federal Reserve Board stated that Vice Chair of Supervision Michael Barr would step down from the position, effective, February 28, 2025.

The Federal Reserve Board stated that it will not issue any major rulemakings from the time of the announcement until a new vice chair for supervision is confirmed by the U.S.

Permissible Activities

As a bank holding company, the Company and its subsidiaries are generally limited to activities deemed by the Federal Reserve Board to be the business of banking or closely related activities that are incidental to banking.

A bank holding company that meets certain criteria may elect to become a financial holding company and thereby engage in a broader array of activities that are financial in nature, such as underwriting equity securities and insurance, as well as those incidental or complementary to financial activities.

The Company has not elected to become a financial holding company.

Bank Acquisitions by the Company

Federal law prohibits a bank holding company, including the Company, from acquiring, directly or indirectly, more than 5% of a class of voting securities of another bank or bank holding company or all or substantially all of the assets of a bank, or merging or consolidating with another bank holding company, without prior written approval of the Federal Reserve Board.

In evaluating applications by bank holding companies to acquire banks, the Federal Reserve Board considers, among other factors, the financial and managerial resources and future prospects of the parties, the effect of the acquisition on the risk to the DIF, the convenience and needs of the community, competitive factors and compliance with anti-money laundering laws.

Late in the Biden administration, the standards by which bank and financial institution acquisitions would be evaluated have been undergoing review and change by the Office of the Comptroller of the Currency (the “OCC”), FDIC and U.S Department of Justice (the “DOJ”), but not by the Federal Reserve Board.

In September 2024, the FDIC and the DOJ finalized changes to their bank merger review policies in the form of non-binding guidance.

Whether and how the guidance might be further changed or interpreted by the Trump administration is uncertain.

The FDIC’s final policy statement addresses, among other things, the scope of transactions subject to FDIC approval.

The final policy statement also addresses a more rigorous FDIC process for evaluating Bank Merger Act applications, and the FDIC Board’s heightened expectations with respect to the Bank Merger Act’s statutory factors.

In addition, the DOJ withdrew its 1995 Bank Merger Guidelines and issued the 2024 Banking Addendum to 2023 Merger Guidelines (“2024 Banking Addendum”).

The DOJ clarified that it will assess competition considerations in connection with bank and bank holding company mergers using its 2023 Merger Guidelines, which is the general merger review framework the DOJ now uses to evaluate transactions in all segments of the economy, and 2024 Banking Addendum.

The 2024 Banking Addendum provides guidance on how the DOJ will assess competition in the specific context of bank and bank holding company mergers.

An analysis under the 2023 Merger Guidelines and 2024 Banking Addendum may include consideration of theories of harm and relevant markets not considered under the 1995 Bank Merger Guidelines, which focused primarily on concentrations of deposits and branches.

The effects of these changes and the Trump administration’s interpretation of merger policies remain uncertain.

Acquisition of the Company

Any holder, other than an individual, of 25% or more of a class of the Company’s voting stock, or a lesser percentage if such holder otherwise exercises a “controlling influence” over the Company, is subject to regulation as a bank holding company under the BHCA.

In addition, any person other than a bank holding company is required to obtain prior non-objection of the Federal Reserve Board to acquire 10% or more of a class of voting stock of the Company under the Change in Bank Control Act, as amended (the “CIBCA”).

In July 2024, the FDIC released a proposed rule to amend its regulations under the CIBCA.

The proposed rule removes an explicit exemption for transactions where the Federal Reserve Board reviews a notice under the CIBCA.

The effect of these proposed changes would be to provide the FDIC with discretion to require a CIBCA notice in addition to any CIBCA notice required by the Federal Reserve Board.

Source of Strength Doctrine

The “source of strength doctrine” requires bank holding companies to provide assistance to their subsidiary depository institutions in the event such subsidiary depository institutions experience financial difficulty.

The Federal Reserve Board has issued regulations requiring that all bank holding companies serve as a source of financial and managerial strength to their subsidiary depository institutions.

Capital Requirements

The Federal Reserve Board and FDIC require bank holding companies, including the Company, and federally insured depository institutions, including Northwest Bank, to meet several minimum capital standards:

a common equity Tier 1 capital to risk-based assets ratio of 4.5%, a Tier 1 capital to risk-based assets ratio of 6.0%, a total capital to risk-based assets ratio of 8.0%, and a Tier 1 capital to total assets leverage ratio of 4.0%.

In determining the amount of risk-weighted assets for purposes of calculating risk-based capital ratios, all assets, including certain off-balance-sheet assets (e.g., recourse obligations, direct credit substitutes, residual interests) are multiplied by a risk weight factor assigned by the regulations based on the risks believed inherent in the type of asset.

Higher levels of capital are required for asset categories believed to present greater risk.

Common equity Tier 1 capital is generally defined as common stockholders’ equity and retained earnings.

Tier 1 capital is generally defined as common equity Tier 1 and additional Tier 1 capital.

Additional Tier 1 capital includes certain noncumulative perpetual preferred stock and related surplus and minority interests in equity accounts of consolidated subsidiaries.

Total capital includes Tier 1 capital (common equity Tier 1 capital plus additional Tier 1 capital) and Tier 2 capital.

Tier 2 capital is comprised of capital instruments and related surplus, meeting specified requirements, and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred stock and subordinated debt.

Also included in Tier 2 capital is the allowance for credit losses limited to a maximum of 1.25% of risk-weighted assets and, for institutions that have exercised an opt-out election regarding the treatment of Accumulated Other Comprehensive Income, up to 45% of net unrealized gains on available-for-sale equity securities with readily determinable fair market values.

Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations.

Northwest Bank exercised this opt-out election during the year ended December 31, 2024 .

Each of the Company and Northwest Bank must hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum risk-based capital requirements in order to avoid limitations on capital distributions, including dividends, and certain discretionary bonus payments to management.

As of December 31, 2024 , Northwest Bank’s capital exceeded all applicable regulatory requirements and it had an appropriate capital conservation buffer.

The following table presents the minimum regulatory capital ratios, minimum ratio plus capital conservation buffer and well-capitalized minimums that the Company and Northwest Bank must satisfy.

Minimum regulatory

capital ratio Minimum

ratio + capital conservation buffer Well capitalized minimums (1) Actual

CET1 risk based capital ratio Northwest Bancshares, Inc.

4.50 % 7.00 % N/A 12.63 %

Northwest Bank 4.50 % 7.00 % 6.50 % 12.63 %

Tier 1 risk based capital ratio Northwest Bancshares, Inc.

6.00 % 8.50 % 6.00 % 13.82 %

Northwest Bank 6.00 % 8.50 % 8.00 % 12.63 %

Total risk based capital ratio Northwest Bancshares, Inc.

8.00 % 10.50 % 10.00 % 16.08 %

Northwest Bank 8.00 % 10.50 % 10.00 % 13.81 %

Tier 1 leverage ratio Northwest Bancshares, Inc.

4.00 % N/A N/A 10.39 %

Northwest Bank 4.00 % N/A 5.00 % 9.50 %

(1) Reflects the well-capitalized standard applicable to Northwest Bank and the well-capitalized standard applicable to the Company under the Federal Reserve Board’s Regulation Y.

Any institution that fails any of the regulatory capital requirements is subject to enforcement action by the Federal Reserve Board or FDIC, as applicable.

Such action may include a capital directive, a cease and desist order, civil money penalties, restrictions on an institution’s operations, termination of federal deposit insurance, and the appointment of a conservator or receiver.

Such action, through enforcement proceedings or otherwise, may require a variety of corrective measures.

For information regarding enforcement actions under the “prompt corrective action” framework under federal law, see “Supervision and Regulation—Federal Banking Regulation—Prompt Corrective Action.”

Capital Distributions.

The Company is a legal entity separate and distinct from its banking and other subsidiaries and relies on dividends from Northwest Bank as its primary source of funding.

There are limitations on the payment of dividends by the Northwest Bank to the Company, as well as by the Company to its shareholders.

For information on dividend limitations under Pennsylvania law, see “Supervision and Regulation—Pennsylvania Savings Bank Law—Dividends.”

The Company and Northwest Bank must maintain the applicable common equity Tier 1 capital conservation buffer of 2.5% to avoid becoming subject to restrictions on capital distributions, including dividends.

For more information on the common equity Tier 1 capital conservation buffer, see “Supervision and Regulation— Federal Bank Holding Company Regulation—Capital Requirements.”

Federal Reserve Board policy provides that a bank holding company should not pay cash dividends unless (1) its net income over the last four quarters, net of dividends paid, is sufficient to fully fund the dividends, (2) the prospective rate of earnings retention appears consistent with the capital needs, asset quality, and overall financial condition of the bank holding company and its subsidiaries, and (3) the bank holding company will continue to meet minimum required capital adequacy ratios.

The policy also provides that a bank holding company should inform the Federal Reserve Board reasonably in advance of declaring or paying a dividend that exceeds earnings for the period for which the dividend is being paid, or that could result in a material adverse change to the bank holding

company’s capital structure.

Bank holding companies also are expected to consult with the Federal Reserve Board before materially increasing dividends.

The Federal Reserve Board could prohibit or limit the payment of dividends by the Company if it determines that payment of the dividend would constitute an unsafe or unsound practice.

A bank holding company that is not well capitalized or well managed, or that is subject to any unresolved supervisory issues, is required to give the Federal Reserve Board prior written notice of any repurchase or redemption of its outstanding equity securities if the gross consideration for repurchase or redemption, when combined with the net consideration paid for all such repurchases or redemptions during the preceding 12 months, will be equal to 10% or more of the company’s consolidated net worth.

The Federal Reserve Board may disapprove such a repurchase or redemption if it determines that the proposal would constitute an unsafe and unsound practice or violate a law or regulation.

However, Federal Reserve Board guidance generally provides for bank holding company consultation with Federal Reserve Board staff prior to engaging in a repurchase or redemption of a bank holding company’s stock, even if a formal written notice is not required.

These regulatory requirements and expectations may affect the ability of the Company to pay dividends, repurchase shares of its common stock or otherwise engage in capital distributions.

Pennsylvania Savings Bank Law

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The Department of Banking may order any savings bank to discontinue any violation of law or unsafe or unsound business practice and may direct any director, officer, or employee of a savings bank engaged in a violation of law, unsafe or unsound practice or breach of fiduciary duty to show cause at a hearing before the Department of Banking why such person should not be removed.

Legislation enacted in 2012 clarified the Department of Banking’s examination and enforcement authority over subsidiaries of Pennsylvania institutions and authorized the assessment of civil money penalties of up to $25,000 under certain circumstances for violations of laws or orders related to the institution or unsafe or unsound practices or breaches of fiduciary duties.

Pennsylvania law provides for the Department of Banking’s examination and enforcement authority over subsidiaries of Pennsylvania institutions and authorizes the assessment of civil money penalties of up to $25,000 under certain circumstances for violations of laws or orders related to the institution or unsafe or unsound practices or breaches of fiduciary duties.

The Department of Banking may also appoint a receiver or conservator for an institution in appropriate cases.

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Although not adopted in regulation form, the Department of Banking requires 6% leverage capital and 10% risk-based capital.

The components of leverage and risk-based capital are substantially the same as those defined by the FDIC, as discussed below.

The components of leverage and risk-based capital are substantially the same as those defined by the FDIC, which are discussed above.

Northwest Bank is subject to Department of Banking regulations that limit the amount that a bank may lend relative to appraised values of real estate securing the loans, as determined by an appraisal at the time of loan origination.

Such regulations permit a maximum loan-to-value of 95% for residential properties and 80% for all other real estate secured loans as established by the FDIC guidance.

Loans-to-One Borrower Limitation

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The Northwest Bank Credit Committee has established an internal lending limit, either individually or in the aggregate to one customer, or a single source of repayment, of $30.0 million, or $50.0 million for loans originated and managed within the Corporate Finance portfolio for borrowers with a strong credit profile and a risk rating of 3 or better, and Aggregate Credit Exposure of $100.0 million.

As of December 31, 2023 we had 7 credit relationships that were equal to or exceeded our $30.0 million internal limit for individual borrowers, 4 credit relationships that were equal to or exceeded our $50.0 million internal limit for individual borrowers within the corporate finance portfolio, and one credit relationship that was equal to or exceeded the $100.0 million internal limit for Aggregate Credit Exposure.

As of December 31, 2024 we had no credit relationships that were equal to or exceeded our $30.0 million internal limit for individual borrowers, 4 credit relationships that were equal to or exceeded our $50.0 million internal limit for individual borrowers within the corporate finance portfolio, and one credit relationship that was equal to or exceeded the $100.0 million internal limit for Aggregate Credit Exposure.

The Company’s ability to pay dividends depends, to a large extent, upon Northwest Bank’s ability to pay dividends to the Company.

The Banking Code states that no dividend may be paid out of surplus without approval of the Department of Banking.

Dividends may be paid out of accumulated net earnings.

Dividends may

be paid out of accumulated net earnings.

No dividend may generally be paid that would result in Northwest Bank failing to comply with its regulatory capital requirements.

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• Limits the activities and investment authority of Northwest Bank;

• Establishes a continuing and affirmative obligation, consistent with Northwest Bank’s safe and sound operation, to help meet the credit needs of its community, including low- and moderate-income neighborhoods;

• Establishes assessment rates for maintaining the DIF;

• Establishes various capital categories resulting in various levels of regulatory scrutiny applied to the institutions in a particular category;

• Establishes standards for safety and soundness;

The FDIC is required by law to examine each regulated institution every twelve months.

The FDIC has the authority to order any savings bank and its directors, officers, or employees to discontinue any violation of law or unsafe or unsound banking practice.

Activities and Investments of Insured State-Chartered Banks

Federal law generally limits the activities as principal and equity investments of state-chartered banks insured by the FDIC and its subsidiaries to those that are permissible for national banks.

Before engaging in a new activity as principal that is not permissible for a national bank or otherwise permissible under federal law or FDIC regulations, an insured state-chartered bank must seek approval from the FDIC to engage in such activity.

The FDIC will not approve the activity unless the insured state-chartered bank meets its minimum capital requirements, and the FDIC determines that the activity does not present a significant risk to the DIF.

Insurance of Deposit Accounts

The deposit accounts of Northwest Bank are insured by the DIF to the maximum amount provided by law.

The FDIC insures deposits up to the standard maximum deposit insurance amount of $250,000.

The FDIC insures deposits up to the standard maximum deposit insurance amount of $250,000 per depositor for each account ownership category.

This insurance is backed by the full faith and credit of the United States Government.

The FDIC charges insured depository institutions premiums to maintain the DIF.

Under the FDIC’s risk-based assessment system, insured institutions deemed less risky pay lower FDIC assessments.

Assessments for institutions with $10 billion or more of assets are primarily based on a scorecard approach by the FDIC, including factors such as examination ratings and modeling measuring the institution’s ability to withstand asset-related and funding-related stress and potential loss to the DIF should the bank fail.

The assessment range (inclusive of possible adjustments specified by the regulations) for institutions with greater than $10 billion of total assets was 2.5 to 42 basis points effective January 1, 2023.

On November 29, 2023, the FDIC adopted a final rule to implement a special assessment to recover the loss to the DIF arising from the protection of uninsured depositors following the closures of two regional banks in the spring of 2023;

the special assessment will only be paid by banking organizations with $5 billion or more in assets.

The FDIC charges insured depository institutions premiums to maintain the DIF, based on the risk each institution poses to the DIF.

The FDIC may increase an insured depository institution’s insurance premiums based on various factors, including the FDIC’s assessment of its risk profile.

Assessments for institutions with $10 billion or more of assets, such as Northwest Bank, are primarily based on a scorecard approach by the FDIC, including factors such as examination ratings and modeling measuring the institution’s ability to withstand asset-related and funding-related stress and potential loss to the DIF should the bank fail.

In response to the bank failures in early 2023, the FDIC implemented a special assessment to recover the losses to the DIF at an annual rate of approximately 13.4 basis points over eight quarterly collection periods, which began in 2024, and currently projects that the special assessment will be collected for an additional two quarters beyond the initial eight-quarter collection period, at a lower rate.

The base for the special assessment is equal to an insured depository institution’s estimated uninsured deposits reported as of December 31, 2022, adjusted to exclude the first $5 billion.

The FDIC may impose additional special assessments from time to time based on the actual losses incurred by the FDIC as a result of the March 2023 bank failures or future failures.

Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged or is engaging in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC or written agreement entered into with the FDIC.

The management of Northwest Bank does not know of any practice, condition or violation that might lead to termination of deposit insurance.

Capital Requirements

Federal regulations require federally insured depository institutions to meet several minimum capital standards:

Higher levels of capital are required for asset categories believed to present greater risk.

Common equity Tier 1 capital is generally defined as common stockholders’ equity and retained earnings.

Tier 1 capital is generally defined as common equity Tier 1 and additional Tier 1 capital.

Additional Tier 1 capital includes certain noncumulative perpetual preferred stock and related surplus and minority interests in equity accounts of consolidated subsidiaries.

Total capital includes Tier 1 capital (common equity Tier 1 capital plus additional Tier 1 capital) and Tier 2 capital.

Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations.

Northwest Bank exercised this opt-out election during the year ended December 31, 2023.

In assessing an institution’s capital adequacy, the FDIC takes into consideration not only these numeric factors but qualitative factors as well, and has the authority to establish higher capital requirements for individual institutions where deemed necessary.

Any institution that fails any of the regulatory capital requirements is subject to enforcement action by the FDIC.

Such action, through enforcement proceedings or otherwise, may require a variety of corrective measures.

In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum risk-based capital requirements.

The following table shows the Basel III regulatory capital levels that must be maintained to avoid limitations on capital distributions and discretionary bonus payments.

Common equity Tier 1 ratio plus capital conservation buffer 7.000 %

Tier 1 risk-based capital ratio plus capital conservation buffer 8.500 %

Total risk-based capital ratio plus capital conservation buffer 10.500 %

As of December 31, 2023, Northwest Bank’s capital exceeded all applicable regulatory requirements and it had an appropriate capital conservation buffer.

Prompt Corrective Action

Federal law requires, among other things, that federal bank regulators take “prompt corrective action” with respect to institutions that do not meet minimum capital requirements.

Federal law requires, among other things, that federal banking agencies take “prompt corrective action” (“PCA”) with respect to insured depository institutions that do not meet minimum capital requirements.

For this purpose, federal law establishes five capital categories:

(1) well capitalized, (2) adequately capitalized, (3) undercapitalized, (4) significantly undercapitalized and (5) critically undercapitalized.

Under applicable regulations, an institution is deemed to be “well capitalized” if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a leverage ratio of 5.0% or greater, and a common equity Tier 1 ratio of 6.5% or greater.

An institution is deemed to be “adequately capitalized” if it has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, a leverage ratio of 4.0% or greater, or a common equity Tier 1 ratio of 4.5% or greater.

An institution is deemed to be “undercapitalized” if it has a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a leverage ratio of less than 4.0% or a common equity Tier 1 ratio of less than 4.5%.

An institution is deemed to be “significantly undercapitalized” if it has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.0%, a leverage ratio of less than 3.0%, or a common equity Tier 1 ratio of less than 3.0%.

An institution is deemed to be “critically undercapitalized” if it has a ratio of tangible equity (as defined in the regulations) to total assets that is equal to or less than 2.0%.

Institutions that fall into an “undercapitalized” category are subject to a variety of mandatory and discretionary supervisory actions, including a restriction on capital distributions and the requirement to file a capital restoration plan with the regulators.

Performance under the capital restoration plan must be guaranteed by the parent holding company up to the lesser of the amount of the capital deficiency when deemed undercapitalized or 5% of the institution’s total assets.

Federal regulations also specify circumstances under which a federal banking agency may reclassify a well capitalized institution as adequately capitalized, and may require an adequately capitalized institution to comply with supervisory actions as if it were in the next lower category (except that the FDIC may not reclassify a significantly undercapitalized institution as critically undercapitalized).

Failure to be well-capitalized or to meet minimum capital requirements could result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a material adverse effect on the Company’s operations or financial condition.

For example, “brokered deposits,” as defined by FDIC regulations, may only be accepted by well capitalized depository institutions without prior regulatory approval or, with a waiver from the FDIC, by adequately capitalized depository institutions.

Institutions that fall into an “undercapitalized” category are subject to a variety of mandatory and discretionary

supervisory actions, including a restriction on capital distributions and the requirement to file a capital restoration plan with the regulators.

Performance under the capital restoration plan must be guaranteed by the parent bank holding company up to the lesser of the amount of the capital deficiency when deemed undercapitalized.

As of December 31, 2024 , Northwest Bank was well capitalized as defined above.

Well capitalized Adequately capitalized Undercapitalized Significantly undercapitalized Actual

CET1 risk based capital ratio ≥ 6.5% ≥ 4.5% < 4.5% < 3.0% 12.63 %

Tier 1 risk based capital ratio ≥ 8.0% ≥ 6.0% < 6.0% < 4.0% 12.63 %

Total risk based capital ratio ≥ 10.0% ≥ 8.0% < 8.0% < 6.0% 13.81 %

Tier 1 leverage ratio ≥ 5.0% ≥ 4.0% < 4.0% < 3.0% 9.50 %

Safety and Soundness Guidelines

The federal banking agencies, including the FDIC, have adopted guidelines prescribing safety and soundness standards relating to internal controls, risk management, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth and compensation, fees and benefits.

These guidelines in general require appropriate systems and practices to identify and manage specified risks and exposures.

The guidelines prohibit excessive compensation as an unsafe and unsound practice and characterize compensation as excessive when the amounts paid are unreasonable or disproportionate to the services performed by an executive officer or employee, director or principal shareholder.

In addition, the federal banking agencies have adopted regulations that authorize but do not require an agency to order an institution that has been given notice by the agency that it is not in compliance with any of the safety and soundness standards to submit a compliance plan.

If after being so notified, an institution fails to submit an acceptable compliance plan, the agency must issue an order directing action to correct the deficiency and may issue an order directing other actions, including those that may limit growth or capital distributions.

Transactions with Affiliates

Transactions between Northwest Bank and its affiliates, including the Company, are limited by Sections 23A and 23B of the Federal Reserve Act, applicable to FDIC-insured state nonmember banks by Section 18(j) of the Federal Deposit Insurance Act, and the Federal Reserve Act ’ s implementing regulation, Regulation W.

Section 18(j) of the Federal Deposit Insurance Act applies the limits of Sections 23A and 23B of the Federal Reserve Act and the Federal Reserve Board ’ s implementing regulation, Regulation W, to transactions between FDIC-insured state nonmember banks and their affiliates, such as Northwest Bank and the Company.

In general, transactions with affiliates must be on terms and under circumstances that are substantially the same, or at least as favorable to the bank, as comparable transactions with non-affiliates.

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Certain transactions with affiliates are required to be secured by specified collateral.

Activities and Investments of Insured State-Chartered Banks

Federal law generally limits the activities as principal and equity investments of state-chartered banks insured by the FDIC and its subsidiaries to those that are permissible for national banks.

Before engaging in a new activity as principal that is not permissible for a national bank or otherwise permissible under federal law or FDIC regulations, an insured savings bank must seek approval from the FDIC to engage in such activity.

The FDIC will not approve the activity unless the savings bank meets its minimum capital requirements, and the FDIC determines that the activity does not present a significant risk to the DIF.

The Company and the Bank are also subject to the “Volcker Rule,” which contains prohibitions on proprietary trading and certain investments in, and relationships with, hedge funds, private equity funds and similar funds.

Federal Home Loan Bank System

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The Federal Home Loan Bank System provides a central credit facility primarily for member institutions.

As a member of the

Federal Home Loan Bank of Pittsburgh, Northwest Bank is required to acquire and hold share of capital stock in the Federal Home Loan Bank in specified amounts.

As a member of the Federal Home Loan Bank of Pittsburgh, Northwest Bank is required to acquire and hold shares of capital stock in the Federal Home Loan Bank in specified amounts.

As of December 31, 2024, Northwest Bank was in compliance with this requirement.

Real Estate Lending Standards and Guidance

The federal banking agencies have adopted uniform regulations prescribing standards for extensions of credit that are secured by liens or interests in real estate or made for the purpose of financing permanent improvements to real estate.

Under these regulations, all insured depository institutions, such as Northwest Bank, must adopt and maintain written policies establishing appropriate limits and standards for extensions of credit that are secured by liens or interests in real estate or are made for the purpose of financing permanent improvements to real estate.

These policies must establish loan portfolio diversification standards, prudent underwriting standards (including loan-to-value limits) that are clear and measurable, loan administration procedures, and documentation, approval and reporting requirements.

The real estate lending policies must reflect consideration of the federal banking agencies’ Interagency Guidelines for Real Estate Lending Policies.

The federal banking agencies have also jointly issued guidance on “Concentrations in Commercial Real Estate Lending” (the “CRE Lending Guidance”), which defines commercial real estate loans as exposures secured by raw land, land development and construction (including 1-4 family residential construction), multi-family property, and non-farm nonresidential property where the primary or a significant source of repayment is derived from rental income associated with the property (that is, loans for which 50% or more of the source of repayment comes from third-party, non-affiliated, rental income) or the proceeds of the sale, refinancing, or permanent financing of the property.

The CRE Lending Guidance requires that appropriate processes be in place to identify, monitor and control

risks associated with real estate lending concentrations.

If a concentration is present, management must employ heightened risk management practices that address key elements, including board and management oversight and strategic planning, portfolio management, development of underwriting standards, risk assessment and monitoring through market analysis and stress testing, and maintenance of increased capital levels as needed to support the level of commercial real estate lending.

The required heightened risk management practices could include enhanced strategic planning, underwriting policies, risk management, internal controls, portfolio stress testing and risk exposure limits as well as appropriately designed compensation and incentive programs.

Higher allowances for credit losses and capital levels may also be required.

The CRE Lending Guidance states that the following metrics may indicate a concentration of commercial real estate loans, bu t that these metrics are neither limits nor a safe harbor:

(1) total reported loans for construction, land development, and other land represent 100% or more of total risk-based capital;

or (2) total reported loans secured by multi-family properties, nonfarm non-residential properties (excluding those that are owner-occupied), and loans for construction, land development, and other land represent 300% or more of total risk-based capital and the bank’s commercial real estate loan portfolio has increased 50% or more during the prior 36 months.

Community Reinvestment Act

All FDIC-insured institutions have a responsibility under the Community Reinvestment Act (the “CRA”) and related regulations to help meet the credit needs of their communities, including low- and moderate-income neighborhoods.

The CRA requires Northwest Bank’s primary federal banking agency, the FDIC, to assess the institution’s record of compliance with the CRA.

Institutions are assigned one of four ratings:

“Outstanding,” “Satisfactory,” “Needs to Improve,” or “Substantial Noncompliance.” These ratings under the CRA are taken into account by the Federal Reserve Board and the OCC when considering merger or other specified applications that the Company or Northwest Bank may submit from time to time.

Northwest Bank received an “Outstanding” rating at its most recent CRA evaluation.

On October 24, 2023, the FDIC, the Federal Reserve Board, and the OCC issued a final rule to strengthen and modernize the CRA regulations.

Under the final rule, banks with assets of at least $2 billion as of December 31 in both of the prior two calendar years will be a “large bank.” The agencies would evaluate large banks under four performance tests:

the Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test, and the Community Development Services Test.

The rule was intended to begin taking effect on April 1, 2024, with most of the provisions to become applicable on January 1, 2026, and additional requirements to become applicable on January 1, 2027.

Several banking industry groups filed a lawsuit seeking to invalidate the CRA final rule, in which they argued that the federal banking agencies exceeded their statutory authority in adopting the CRA final rule.

In March 2024, a federal judge granted an injunction to extend the CRA final rule’s effective date.

The effective date will be extended each day the injunction remains in place, pending the resolution of the lawsuit.

It is unknown whether and when the CRA final rule will become effective.

Consumer Protection Laws

Northwest Bank is subject to a number of federal laws designed to protect its customers.

These consumer protection laws apply to a broad range of its activities and to various aspects of its business and include laws relating to interest rates, fair lending, disclosures of credit terms and estimated transaction costs to consumer borrowers, debt collection practices, the use of and the provision of information to consumer reporting agencies, and the prohibition of unfair, deceptive or abusive acts or practices in connection with the offer, sale or provision of consumer financial products and services.

Administration of many of these consumer protection rules are the responsibility of the CFPB, which has exclusive supervisory authority over insured depository institutions with more than $10 billion in total assets and any affiliates thereof.

The CFPB also has authority to define and prevent unfair, deceptive and abusive practices in the consumer financial area, and expanded data collecting powers for purposes of determining bank compliance with the fair lending laws.

In December 2024, the CFPB issued a final rule that would become effective on October 1, 2025, which, if it goes into effect as currently issued, would including imposing certain requirements on overdraft fees, similar to those that apply to credit cards, unless the financial institution limits the overdraft fee to an amount that covers the institution’s costs and losses to provide the service or $5.

In addition, the Federal Reserve Board has proposed, but not yet finalized, amendments to Regulation II that would lower the cap on debit interchange fees and institute a process for automatically recalculating the debit interchange fee cap every two years based upon a biennial survey of large debit card issuers.

The Bank Secrecy Act and USA PATRIOT Act

The Bank Secrecy Act (“BSA”) and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) require Northwest Bank to implement a compliance program to detect and prevent money laundering, terrorist financing, and illicit crime.

Together, the BSA and USA PATRIOT Act require Northwest Bank to implement internal controls, conduct customer due diligence, maintain records, and file reports.

The Bank Secrecy Act (the “BSA”), as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”), and its implementing regulations require Northwest Bank to implement a compliance program designed to detect and prevent money laundering, terrorist financing, and other illicit

financial crimes.

The BSA, as amended, and its implementing regulations require Northwest Bank to implement, among other things, internal controls, policies and procedures;

conduct customer due diligence;

and adhere to certain recordkeeping and reporting requirements.

The Anti-Money Laundering Act of 2020 (the “AML Act”), enacted as part of the National Defense Authorization Act, requires the U.S.

Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) to issue a number of rules that will update and expand the BSA’s regulatory requirements.

For example, the AML Act requires FinCEN to issue National Anti-Money Laundering ]and Countering the Financing of Terrorism Priorities (the “National Priorities”), which the agency did in June 2021, and to conduct studies and issue regulations that may alter some of the due diligence, record-keeping and reporting requirements that the BSA and USA PATRIOT Act impose on banks.

FinCEN has yet to issue a final rule that establishes the compliance obligations of financial institutions with respect to the National Priorities, and several other mandatory rulemakings under the AML Act remain outstanding.

The AML Act also promotes increased information-sharing and use of technology and increases penalties for violations of the BSA and includes whistleblower incentives, both of which could increase the prospect of regulatory enforcement.

The AML Act also includes the Corporate Transparency Act (the “CTA”), which requires FinCEN to, among other things, establish a national beneficial ownership information registry.

In September 2022, FinCEN issued the final Beneficial Ownership Information Reporting Requirements rule (the “BOI Reporting Rule”) which, effective January 1, 2024, requires certain “reporting companies” to file beneficial ownership information reports with FinCEN that will be stored in the national beneficial ownership registry and will detail the reporting company’s beneficial owners.

In December 2023, FinCEN issued the final Beneficial Ownership Information Access and Safeguards rule—the second of three rulemakings that would implement the CTA—which governs access to the national beneficial ownership registry.

FinCEN has not yet issued the third CTA-implementing regulation, which will amend the beneficial ownership requirements applicable to banks and other covered financial institutions under FinCEN’s existing Customer Due Diligence rule.

The constitutionality of the CTA is subject to ongoing litigation.

The USA PATRIOT Act also required the federal banking agencies to take into consideration the effectiveness of controls designed to combat money laundering activities in determining whether to approve a merger or other acquisition application.

Accordingly, if we engage in a merger or other acquisition, our controls designed to combat money laundering would be considered as part of the application process.

We have established policies, procedures and systems designed to comply with the BSA, USA PATRIOT Act, and regulations implemented thereunder.

Community Reinvestment Act

All FDIC-insured institutions have a responsibility under the Community Reinvestment Act (“CRA”) and related regulations to help meet the credit needs of their communities, including low- and moderate-income neighborhoods.

In connection with its examination of a state-chartered savings bank, the FDIC is required to assess the institution’s record of compliance with the CRA.

On October 24, 2023, the FDIC, the Federal Reserve Board, and the Office of the Comptroller of the Currency issued a final rule to strengthen and modernize the CRA regulations.

Under the final rule, banks with assets of at least $2 billion as of December 31 in both of the prior two calendar years will be a “large bank.” The agencies will evaluate large banks under four performance tests:

the Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test, and the Community Development Services Test.

The applicability date for the majority of the provisions in the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027.

Holding Company Regulation

As a bank holding company, Northwest Bancshares, Inc.

is subject to regulation, examination and supervision by, and periodic reporting to, the Federal Reserve Board.

The Federal Reserve Board has enforcement authority over the Company and any non-bank subsidiaries.

Among other things, this authority permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a risk to Northwest Bank.

Permissible Activities.

The Company’s activities are limited to the activities permissible for bank holding companies, which generally include activities deemed by the Federal Reserve Board to be closely related or a proper incident to banking or managing or controlling banks.

A bank holding company that meets certain criteria may elect to be regulated as a financial holding company and thereby engage in a broader array of financial activities, such as underwriting equity securities and insurance.

Northwest Bancshares, Inc.

has not elected to be regulated as a financial holding company.

Federal law prohibits a bank holding company, including Northwest Bancshares, Inc., from acquiring, directly or indirectly, more than 5% of a class of voting securities of, or all or substantially all of the assets of, another bank or bank holding company, without prior written approval of the Federal Reserve Board.

Bank holding companies with greater than $3 billion in total consolidated assets are subject to consolidated regulatory capital requirements identical to those applicable to the subsidiary depository institutions.

Northwest Bancshares, Inc.

was in compliance with the holding company capital requirements and the capital conservation buffer as of December 31, 2023.

Source of Strength Doctrine.

The Federal Reserve Board has issued regulations requiring that all bank holding companies serve as a source of financial and managerial strength to their subsidiary depository institutions.

Capital Distributions.

The Federal Reserve Board has issued a policy statement regarding the payment of dividends by bank holding companies.

In general, the policy provides that dividends should be paid only out of current earnings and only if the prospective rate of earnings retention by the holding company appears consistent with the organization’s capital needs, asset quality and overall supervisory financial condition.

Separate regulatory guidance provides for prior consultation with Federal Reserve Bank supervisory staff concerning dividends in certain circumstances, such as where the company’s net income for the past four quarters, net of dividends previously paid over that period, is insufficient to fully fund the dividend, the proposed dividend exceeds earnings for the period for which it is being paid, or the company’s overall rate of earnings retention is inconsistent with the company’s capital needs and overall financial condition.

The guidance also provides for prior consultation with supervisory staff for material increases in the amount of a bank holding company’s common stock dividend.

The ability of a bank holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized.

Federal Reserve Board regulatory guidance also indicates that a bank holding company should inform Federal Reserve Bank staff prior to redeeming or repurchasing common stock or perpetual preferred stock if the bank holding company is experiencing financial weaknesses or the repurchase or redemption would result in a net reduction, at the end of a quarter, in the amount of such equity instruments outstanding compared with the beginning of the quarter in which the redemption or repurchase occurred.

Federal Reserve Board regulations require prior approval for a bank holding company to repurchase or redeem its equity securities if the gross consideration, when combined with net consideration paid for all such repurchases or redemptions during the preceding 12 months, will equal 10% or more of the holding company’s consolidated net worth.

There is an exception for well-capitalized bank holding companies that meet specified qualitative criteria.

Federal Reserve Board guidance provides for prior consultation with supervisory staff and nonobjection under specified circumstances prior to a holding company repurchasing or redeeming regulatory capital instruments, including common stock, regardless of the applicability of the previously referenced notification requirement.

These regulatory policies may affect the ability of Northwest Bancshares, Inc.

to pay dividends, repurchase shares of its common stock or otherwise engage in capital distributions.

Acquisition of the Company.

Under the Change in Bank Control Act, no person may acquire control of a bank holding company, such as Northwest Bancshares, Inc., unless the Federal Reserve Board has been given 60 days’ prior written notice and has not issued a notice disapproving the proposed acquisition, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the competitive effects of the acquisition.

Control, as defined under the Change in Bank Control Act, means ownership, control of or power to vote 25% or more of any class of voting stock.

There is a rebuttable presumption of control upon the acquisition of 10% or more of a class of voting stock if the holding company involved has its shares registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or if no other person will own, control or hold the power to vote a greater percentage of that class of voting security after the acquisition.

A company that acquires control of a bank holding company, such as Northwest Bancshares, Inc., must receive prior Federal Reserve Board approval under the Bank Holding Company Act.

Control, as defined under the Bank Holding Company Act, means ownership, control or power to vote 25% or more of any class of voting stock, control in any manner over the election of a majority of the company’s directors, or a determination by the regulator that the acquirer has the power to exercise, directly or indirectly, a controlling influence over the management or policies of the company.

The Federal Reserve Board adopted a final rule in 2020 that revised its framework for determining whether a company, under the Bank Holding Company Act, exercises a “controlling influence” over a bank or a bank holding company.

The Federal Reserve Board’s final rule applies to questions of control under the Bank Holding Company Act but does not extend to the Change in Bank Control Act.

We have established policies, procedures and systems designed to comply with the BSA, as amended, and its implementing regulations.

Federal Securities Laws

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The Sarbanes-Oxley Act of 2002 was enacted to increase corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies, and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws.

The Sarbanes-Oxley Act generally applies to all companies that file or are required to file periodic reports with the Securities and Exchange Commission, under the Exchange Act.

In particular, the Sarbanes-Oxley Act established, among other things:

(i) requirements for audit and other key Board of Directors committees involving independence, expertise levels, and specified responsibilities;

(ii) responsibilities regarding the oversight of financial statements by the Chief Executive Officer and Chief Financial Officer of the reporting company;

(iii) standards for auditors and the regulation of audits, including independence provisions which restrict non-audit services that accountants may provide to their audit clients;

(iv) increased disclosure and reporting obligations for the reporting company and its directors and executive officers including accelerated reporting of company stock transactions;

(v) a prohibition of personal loans to directors and officers, except certain loans made by insured financial institutions on non-preferential terms and in compliance with other bank regulator requirements;

and (vii) a range of new and increased civil and criminal penalties for fraud and other violations of the securities laws.

The Sarbanes-Oxley Act generally applies to all companies that file or are required to file periodic reports with the SEC, under the Exchange Act.

The Company has policies, procedures and systems designed to comply with this Act and its implementing regulations.

FEDERAL AND STATE TAXATION

Federal Taxation .

For federal income tax purposes, Northwest Bancshares, Inc.

files a consolidated federal income tax return with its wholly-owned subsidiaries on a calendar year basis.

The applicable federal income tax expense or benefit is properly allocated to each subsidiary based upon taxable income or loss calculated on a separate company basis.

We account for income taxes using the asset and liability method which accounts for deferred income taxes by applying the enacted statutory rates in effect at the balance sheet date to differences between the book basis and the tax basis of assets and liabilities.

The resulting deferred tax liabilities and assets are adjusted to reflect changes in tax laws.

Inflation Reduction Act of 2022.

The Inflation Reduction Act, which was signed into law on August 16, 2022, among other things, implements a new alternative minimum tax of 15% on corporations with profits in excess of $1 billion, a 1% excise tax on stock repurchases, and several tax incentives to promote clean energy and climate initiatives.

These provisions are effective beginning January 1, 2023.

State Taxation .

As a Maryland business corporation, Northwest Bancshares, Inc.

is required to file annual tax returns with the State of Maryland.

In addition, Northwest Bancshares, Inc.

is subject to Pennsylvania’s corporate net income tax.

Dividends received from Northwest Bank qualify for a 100% dividends received deduction and are not subject to corporate net income tax.

Northwest Bank is subject to Pennsylvania’s mutual thrift institutions tax based on Northwest Bank’s net income determined in accordance with generally accepted accounting principles, with certain adjustments.

The tax rate under the mutual thrift institutions tax is 11.5%.

Interest on Pennsylvania and federal obligations is excluded from net income.

An allocable portion of interest expense incurred to carry the tax-free obligations is disallowed as a deduction.

Northwest Bank is also subject to taxes in the other states in which it conducts business.

These taxes are apportioned based upon the volume of business conducted in those states as a percentage of the whole.

A majority of Northwest Bank’s affairs are conducted in Pennsylvania;

however as the Company’s operational footprint expands, taxes paid to other states, such as New York (with a 7.25% rate) and Indiana (with a 6% rate) have grown slightly in significance.

The subsidiaries of Northwest Bank are subject to a Pennsylvania corporate net income tax and are also subject to other applicable taxes in the states where they conduct business.

We are subject to routine audits of our tax returns by the Internal Revenue Service as well as all states in which we conduct business.

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

Data Privacy and Cybersecurity

Data privacy and cybersecurity are areas of significant and increasing federal and state regulation.

Like other businesses in the U.S., the Company and its non-banking subsidiaries are subject to the rules and regulations promulgated under the authority of the Federal Trade Commission which regulates unfair or deceptive acts or practices, including with respect to data privacy and cybersecurity.

Other federal and state laws and regulations impact the Company’s ability to share certain information with affiliates and non-affiliates for marketing and/or non-marketing purposes.

Moreover, the U.S.

Congress has recently considered, and is currently considering, various proposals for more comprehensive data privacy and cybersecurity legislation, to which the Company and its subsidiaries may be subject if passed.

Financial institutions, including the Company and Northwest Bank, are also subject to the Gramm-Leach-Bliley Act which, among other things:

(i) imposes certain limitations on their ability to share nonpublic personal information about their customers with nonaffiliated third parties;

(ii) requires that they provide certain disclosures to customers about their information collection, sharing and security practices and afford customers the right to “opt out” of any information sharing by them with nonaffiliated third parties (with certain exceptions);

and (iii) requires that they develop, implement and maintain a written comprehensive information security program containing appropriate safeguards based on their size and complexity, the nature and scope of their activities, and the sensitivity of customer information they process, as well as plans for responding to cybersecurity breaches.

Like other lenders, Northwest Bank also uses credit bureau data in its underwriting activities, and use of such data is regulated under the Fair Credit Reporting Act, which regulates reporting information to credit bureaus, prescreening individuals for credit offers, sharing of information between affiliates, and using affiliate data for marketing purposes.

Similar state laws may impose additional requirements on Northwest Bank.

In November 2021, the Federal Reserve Board, the Office of the Comptroller of the Currency and the FDIC adopted a regulation that, among other things, requires a banking organization to notify its primary federal regulators as soon as possible (and in any event within 36 hours) after identifying a “computer-security incident” that the banking organization believes in good faith has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, its business or operations in a manner that would, among other things, jeopardize the viability of its operations, result in customers being unable to access their deposit and other accounts, result in a material loss of revenue, profit or stock price, or pose a threat to the stability of the U.S.

financial sector.

The enactment of the Cyber Incident Reporting for Critical Infrastructure Act (“CIRCIA”) in 2022, once rulemaking is complete, will separately require, among other things, covered entities to report significant cyber incidents, including ransomware attacks, to the Cybersecurity and Infrastructure Agency (“CISA”) within 72 hours from the time the covered entity reasonably believes the incident occurred (and within 24 hours of making a ransom payment as a result of a ransomware attack).

The CISA proposed a rule under the CIRCIA in April 2024 that, among other things, would clarify the scope of cyber incidents to be reported and would further define covered entities subject to the CIRCIA to expressly include companies in the financial services sector that are required to report cyber incidents their respective primary federal regulators.

States also have enacted, and are increasingly proposing or enacting, legislation that relates to data privacy and cybersecurity, such as the California Consumer Privacy Act, as amended by the California Privacy Rights Act.

In addition, laws in all 50 U.S.

states require businesses to provide notice under certain circumstances to consumers whose personal information has been disclosed as a result of a data breach.

For more information on data privacy and cybersecurity-related risks, see “Item 1A.

Risk Factors” under the headings “Data privacy and cybersecurity are areas of heightened legislative and regulatory scrutiny” and “Risks associated with system failures, interruptions, or cybersecurity breaches could negatively affect our earnings.”

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What changed 10-K

Item 1. Business