Northwest Bancshares, Inc. · NASDAQ:NWBI
Northwest Bancshares — Investor Presentation (February 2011)
41 slides from Northwest Bancshares's investor presentation, Feb 17, 2011
Slide 1: Northwest Bancshares, Inc.
4Yoms2yYWO2 NORTHWEST BANCSHARES, INC. NASDAQ: NWBI Current Market Value: $12.47 As of February 11, 2011
Slide 2: Forward-Looking Statements
4omsSs DTDyxaw’woe Forward-Looking Statements This presentation contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” and words of similar meaning. These forward-looking statements i
Slide 3: Corporate Profile and Overview
Corporate Profile and Overview = Holding Company is regulated by the OTS, Bank is regulated by the FDIC and PA Department of Banking. New regulator for the Holding Company will be the Federal Reserve. = 171 retail banking locations = 52 consumer finance locations ($116.3 mil in assets, $2.7 mil in n
Slide 4: Franchise
ve Franchise Maryland New York © Corporate Headquarters I Northwest Savings Bank and Northwest Consumer Discount Company I Northwest Savings Bank [BB Northwest Consumer Discount Company ~ Northwest Consumer Pennsylvania 142 New York 7 Onio 4 ‘Maryland 5 Florida 3 TOTAL fal 51
Slide 5: Market Strategies
Market Strategies Florida « Announced exit strategy on January 25, 2011 ¢ Will close all three offices on or before June 30, 2011 « Felt closure was a cheaper alternative than selling ¢ Closing expenses are relatively low — less than $1.5 million « Reasons for leaving: * Limited presence in large me
Slide 6: Market Strategies
Market Strategies Pennsylvania and Western New York * Considered to be our core markets where we will continue to increase market share and expand our product offerings Maryland * Most likely will not be acquiring whole banks * Most likely will not be a big retail player * Believe there are good opp
Slide 7: Experienced Management & Board of Directors
Experienced Management & Board of Directors = Executive officers average 30 years of banking experience. = Average tenure for executive officers at Northwest is 22 years. =Stable and experienced Board of Directors; 9 out of 10 are Independent Directors Years of Employed Banking Executive Officer Tea
Slide 8: Historical Performance
Yoms DAR OL Historical Performance
Slide 9: Northwest has demonstrated the ability to safely leverage its capital
Northwest has demonstrated the ability to both safely leverage its capital and change its strategic direction when necessary. $10.08 $2.08 $8.08 ae $408 — san ge 28 $1.9 $20 | $18 ( \ iil mn LOEPEPPEPO EE og gg
Slide 10: Our Franchise Since IPO
Our F se Since IPO = About 50% of our balance sheet growth was organic, the other 50% was accomplished through mergers and acquisitions. = Organic Growth = 56 De Novo Branch Openings = 24 Northwest Consumer Discount offices = Merger and Acquisition activity: = Branch Purchases — 10 acquisitions with
Slide 11: Operating Trends
4Yoms2yYWO2 Operating Trends
Slide 12: Interest Rate Spread
Interest Rate Spread While organic and acquisition growth successfully leveraged Northwest's capital, net interest spread was relatively flat and below peer averages. Changes in loan and deposit mix were needed to improve profitability ratios. 4.00% 73.81% 3795, 3.50% SHAM oon 320% 325% 330% _ 2.97%
Slide 13: Composition of Loan Portfolio
Composition of Loan Portfolio December December December December 2005 2006 2009 2010 (One-to-four family 59.5% 48.9% %o 441% 43.3% Aultitamily and Commercial R.E. 12.6% 18.3% 23.3% 24.4% ‘onsumer (including home equity) 24.6% 25.4% % 25.6% 24.5% ommercial Business 3.3% TA% 7.0% December 2005 Decemb
Slide 14: Composition of Deposits
Composition of Deposits December December December December 2005 2006 2007 2010 21.8% 22.3% 15.1% 16.4% 114% 14.3% 14.6% ertificates of Deposit 52.4% 55.3% 48.8% 46.7% December 2005 December 2010 t] Money Market 15.6%
Slide 15: Deposit Growth
Deposit Growt $7.0B $5.8 508 ss2 sa2 ssa 84 85 a $5.08 7 $4.06 $2.08 $208 J 6 sus #8 | | i| $1.08 iil $0.08 ve ul PEE SEE EES ESS Sg Growth Between 2008 and 2010. Deposit Growth Deposits ($000) _ (%) Non-interest Searing Demand $181,270 46.0% Interest-bearing Demand $76,137 10.8% ‘Savings Deposits $
Slide 16: Core Earnings Comparison
Core Earnings Comparison Average Assets Net Interest Income Provision for Loan Losses Provision in Excess of 20 bp. Adjusted Provision Noniinterest Income OTT! Adjustments Gain on Sale of Investments Loss on Sale of REO Mortgage Banking Income (Recovery) Impairment of MSRs Gain on Bargain Purchase A
Slide 17: Profitability Trends
Profitability Trends 450% 200% 4.00% 150% aa 120% 37% aK 282% — samme 1% 118% tom fees 3.50% 1.00% = = ee es — en orm BOO% 1 anew 3% 0.50% | 05% 0.8% ore 2.50% 0.00% sopns §12NT = t2nIne «2D RIO ee ee ee NB! a Peer Medan —nwet a Pear tteaion Non-interest Expense / Average Assets ROAA 3.50% 2.00% 20%
Slide 18: Asset Quality
4Yoms2yYWO2 Asset Quality
Slide 19: Reserve & Charge-Offs History
Reserve & Charge-Offs History Northwest's actual losses have historically been much lower than its peer group. Conservative underwriting and a commitment to working with our borrowers, have kept our losses at comparatively low levels during the current economic crisis. { Dotars in thousands) SURG EI
Slide 20: Delinquent Loans
Delinquent Loans 4.00% 36% 3.5% 3.7% ae 1.9% 1.8% 2.2% 21% 2.00% oy a 0.4% 0.8% ome 1.00% — 1.0% oa 14% 1.3% 0.00% 123106 12131107 12131108 131109 asin 1§30t959 60% 69 MIODays oF More Total Delinquency % by Loan Type (30 to 90+ days) ie 10.4% 10.0% 8.0% 5.7% 0% 65% V4 5.3% 5A% is 5.6% 6.0% i Ga 5% 4
Slide 21: Asset Quality
Asset Quality 250% 1.81% 2.08% 20% 1.67% 1.50% 4.00% 0.72% hadi 0.50% 0.00% 123106 12/8107 12/3108 123109 12/81/10. == NWBI ——Peer Avg. At June 30, 2004-2005 2006 PLsTotal Loans (%) 0.80 0.77 0.92 1.03 1.93 2.35 2.69 Jllowance for Loan Losses / NPLs (%) 9435 9391 «92.92, 84225537 5649. Allowance for
Slide 22: Loan Breakdown By State
Loan Breakdown By State Loans by State (based on borrowers’ residence) at December 31, 2009 = 90% of our loans are located in our core market of Pennsylvania and New York. One-to-four family mortgage [Pennsylvania S 1,942,824 162,367 20,111 194,607 30,908 47.487 $2,398,304 Loans 90 Days Past Due One
Slide 23: Average Mortgage Loan Balance and LTV
Average Mortgage Loan Balance and Northwest’s average mortgage balance is extremely low which enables borrowers to continue making their payments during times of economic challenge. Conservative underwriting has ensured that Northwest's mortgage customers have a significant equity position in their
Slide 24: Investment Securities Portfolio
Investment Securities Portfolio = High quality portfolio with 96% backed by U.S. government, G.S.E., or municipalities = Only $9.4 million, or 0.7%, of level Ill investments At December 31, 2010 Adj %of Amortized ToDate Amortized © Market ‘Unrealized Unrealized (Dollars in thousands) Portfolio Cost
Slide 25: Municipal Securities Breakdown
Municipal Securities Breakdown (Dollars in thousands) [Pennsylvania ‘School District General Obligation Revenue Bonds [Total Pennsylvania New York Ohio [All Other States [Total Municipal Securities At December 34, 2010 Amortized ToDate Adj. Amortized Market Cost om Cost Value Unrealized Unrealized G
Slide 26: Stock Performance and Per Share Information
Yoms DAR OL Stock Performance and Per Share Information
Slide 27: Price Performance Since IPO (11/4/94)
Price Performance Since IPO (11/4/94) Since its IPO in 1994, Northwest has significantly outperformed the SNL U.S. Bank Index and the S&P 500 Index. Northwest Bancshares, Inc. - Total Return (%) — nwa (+840.445) — Se? 500 (+287.45%) — SNL US. Bank (+238.57%) 1,009) 800] 609| 400] Total Return (%) 20
Slide 28: Tangible Book Value Per Share
Tangible Book Value Per Share (Adjusted for Splits and Second-Step Exchange) $1200 $10.31 $10.26 $10.00 233% Increase a $3.93 te SLE LE PEP PEPE EOE OS 28
Slide 29: Annual Dividends Paid Per Share
Annual Dividends Paid Per Share (adjusted for splits and exchanges) In early years, dividend payments were controlled as Northwest was focused on retaining capital and growing its franchise. In recent years, as acquisitions became expensive, Northwest steadily increased its dividends and provided a
Slide 30: Stock Buybacks
Stock Buybacks * On November 8, 2010 we announced a program to buy back 10% of our outstanding shares (approximately 11 million shares) « From December 18, 2010, the one-year anniversary of the completion of our second-step offering, until December 31, 2010, we purchased 555,000 shares at an average
Slide 31: Regulatory Issues
4Yoms2yYWO2 Regulatory Issues
Slide 32: Regulatory Environment
Regulatory Environment + Extremely difficult * Banking is already an extremely over-regulated industry * Passage of the Wall Street Reform and Consumer Protection Act or Dodd Frank Act presents overwhelming compliance challenges for our industry: — 2,300 pages of legislation — Estimated to result in
Slide 33: Northwest's Regulatory Issues
Northwest's Regulatory Issues EDIC Compliance Examination Background + With $8.1 billion in assets, Northwest's primary federal supervisor for compliance issues is the FDIC * The new Consumer Financial Protection Bureau (CFPB) will regulate all institutions over $10 billion * The CFPB will have sign
Slide 34: Northwest's Regulatory Issues
Northwest's Regulatory Issues Northwest's Response to the Compliance Examination * Immediately engaged a compliance consultant to review our compliance management program + Restructured our senior management team with Compliance and Internal Audit Departments reporting to the CEO « Expanded the targ
Slide 35: Strategic Direction
Yoms DAR OL Strategic Direction
Slide 36: Strategic Direction
Strategic Direction Major Goals * Get out of the “penalty box” with the FDIC * Maintain a disciplined acquisition strategy with an emphasis on institutions that possess good branch networks and good deposit mixes — Preference for institutions within existing footprint or in contiguous markets in PA,
Slide 37: Northwest Savings Bank
M NORTHWEST SAVINGS BANK Where people make the difference.
Slide 38: Assets Under Management
Assets Under Management (in millions of dollars) $1,400 + $1,200 $1,000 $800 $600 + $400 $200 $0 $1,224 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 38
Slide 39: Investment Opportunity
Yoms DAR OL Investment Opportunity
Slide 40: Investment Opportunity in Northwest
Investment Opportunity in Northwest * Experienced management team * Conservative credit culture * Substantial growth opportunities in attractive markets ¢ Attractive price (122% of tangible book value) given our strong capital position and our history of managing capital 40
Slide 41: J.D. Power and Associates
J.D, Power and Associates 2010 Retail Banking Customer Satisfaction Study NORTHWEST SAVINGS BANK 5T IN CUSTOMER SATISFACTION IN MID-ATLANTIC REGION 41
Northwest Bancshares — Investor Presentation (February 2011) on 6ix