Northwest Bancshares, Inc. · NASDAQ:NWBI
Northwest Bancshares — Investor Presentation (April 2011)
65 slides from Northwest Bancshares's investor presentation, Apr 21, 2011
Slide 1: Northwest Savings Bank - Highest Customer Satisfaction
SAVINGS BANK iN) NORTHWES | “Highest Customer Satisfaction with Retail Banking in the Mid-Atlantic Region” J.D. Power and Associates Ger 2010 Retail Banking Satisfaction Study l| INIDSRIIEMEST
Slide 2: Northwest Bancshares, Inc. NASDAQ: NWBI
4Yoms2yYWO2 NORTHWEST BANCSHARES, INC. NASDAQ: NWBI Current Market Value: $12.17 As of April 19, 2011
Slide 3: 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 4: Corporate Profile and Overview
Corporate Profile and Overview = 171 retail banking locations = 52 consumer finance locations ($117.7 mil in assets, $2.4 mil in net income for year ended 12/31/10) = 1,881 full-time equivalent employees = Total assets of $8.1 billion = Net loans of $5.5 billion = Deposits of $5.8 billion = Total ta
Slide 5: Footprint
Footprint 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 scount Company tions glecoog
Slide 6: Historical Performance
Historical Performance
Slide 7: Asset Growth
Asset Growth Northwest has demonstrated the ability to both safely leverage its capital and change its strategic direction when necessary. $10.08 $2.08 $89 : ee goa $64 985 $67 ‘aie a $408 ae san 2.6 sig 921 a $20 | $18 ( iil wo LOEPEPPEPO EE og gg
Slide 8: Growth of Our Franchise Since IPO
Growth of Our Franchise Since |PO = About 50% of our balance sheet growth was organic, the other 50% was accomplished through mergers and acquisitions. = Organic Growth = 55 De Novo Branch Openings = 24 Northwest Consumer Discount offices = Merger and Acquisition activity: = Branch Purchases — 10 ac
Slide 9: Business Lines
Business Lines Direction and Success
Slide 10: Business Banking
Yoms DAR OL Business Banking
Slide 11: Business deposits have grown rapidly
Northwest’s business deposits have grown rapidly in recent years... BUSINESS DEPOSIT BALANCES In millions of dollars $900 - $871.4 $784.5 on 4 $665.9 $601.2 600 _ $583.9 $500 $400 - $300 $200 - $100 - $- T r r r 1 2006 2007 2008 2009 2010 1
Slide 12: Average cost of business deposits has decreased
while the average cost of such deposits has decreased. COST OF BUSINESS DEPOSITS 2.5% 5 2.16% 20% - 1.93% 1.5% - 1.0% - 0.81% 0.56% 0.5% © 0.28% 0.0% | 2006 2007 2008 2009 2010 12
Slide 13: Commercial loans have grown substantially
Northwest’s commercial loans have grown substantially over the past five years... COMMERCIAL LOANS In millions of dollars $2,000 - $1,886.0 $1,800 $1,695.7 $1,600 - $1,487.4 $1,400 - $1,274.1 $1,200 - $1,000 - $937.3 $800 - $600 - $400 - $200 - $0 T 1 T T 1 2006 2007 2008 2009 2010 13
Slide 14: Commercial loan yields remain attractive
While yields have remained at attractive levels despite the low interest rate environment. COMMERCIAL LOAN YIELDS vs. 3-YEAR TREASURY AT DECEMBER 31 8.00% > 7.28% 7.27% 7.00% - 6.00% - Ba 5.82% 5.73% 5.00% - 4.47% 4.00% - 3'07% 3.00% - op 1.70% ome | 1.00% 1.02% 0.00% : ; 2006 2007 2008 2009 2010 =N
Slide 15: Loan losses vs. industry average
Losses on the loan portfolio have been low compared to industry averages. In recent years, they have increased due to the effects of a prolonged recession. LOAN LOSSES VS. INDUSTRY AVERAGE LOSSES as a % of loans 9 ear 2.50% 2.59% 2.00% 1.50% 1.29% 9 100% 0.59% 0.51 0.63 0.50% 0.39% 7 0.00% = 1 1 200
Slide 16: Benefits Management
Yoms DAR OL Benefits Management
Slide 17: Expanded benefit management with Veracity Benefit Designs
Northwest greatly expanded our benefit management line this past year with the addition of Veracity Benefit Designs, a New York corporation. Veracity specializes in the following employee/employer group benefit plans and policies: * Medical Dental Vision * Life Accidental death and dismemberment Lon
Slide 18: Business assets under management
Business assets under management have increased steadily and remain the fastest growing part of our investment management business. BUSINESS ASSETS UNDER MANAGEMENT In millions of dollars $717 $700 - $600 - — $590 sso0 SS $437 $400 - $300 - $200 - $100 - $- T r 1 r 1 2006 2007 2008 2009 2010 18
Slide 19: Number of business clients
Northwest has expanded the number of clients in recent years... NUMBER OF BUSINESS CLIENTS 1200 5 4,119 | 656 So ae a 600 | 400 - 200 - 0 ' 2006 2007 2008 2009 2010 19
Slide 20: Number of benefit plans administered
along with the number of benefit plans administered... NUMBER OF BENEFIT PLANS ADMINISTERED 1600 | 1,538 800 | 729 me oe il 600 + 400 + 200 - i) : : : : 1 2006 2007 2008 2009 2010 20
Slide 21: Revenue from business services
which has driven an increase in fee income from these business lines. REVENUE FROM BUSINESS SERVICES In millions of dollars $7.3 a ] ez $4.1 $4.0 $4.1 $3 - $2 - $1 - §- 1 ; 2006 2007 2008 2009 2010 21
Slide 22: Personal Banking
Yoms DAR OL Personal Banking
Slide 23: Success in procuring new checking accounts
Northwest has had great success in recent years in procuring new checking accounts. # OF CHECKING ACCOUNTS 250,000 5 203,354 213.359 200,000 | 175,703 186,156 189,424 150,000 - 100,000 - 50,000 - 2006 2007 2008 2009 2010 23
Slide 24: Checking account balances
Checking account balances have also increased rapidly in recent years... CHECKING ACCOUNT BALANCES In millions of dollars $800 - $779.3 $725.6 $700 - sooo $659.7 ©8926 © S816. $500 - $400 - $300 - $200 $100 & . . | | 2006 2007 2008 2009 2010 24
Slide 25: Checking account fees
and provided significant growth in checking- related fee income. CHECKING ACCOUNT FEES In millions of dollars $34.8 $30.0 $35 | $31.5 $30 $25 | $226 sa $20 | $15 | $10 | $5 | $- : 2006 2007 2008 2009 2010 25
Slide 26: Cost of deposits vs. 1-year Treasury
Our progress in changing the mix of deposits has contributed to a significant decrease in cost of deposits. COST OF DEPOSITS VS. 1-YEAR TREASURY YIELD AT DECEMBER 31 6.00% 5 som - 5.00% 4.00% - 3. 3.29% 3.34% 3.00% - 2.08% 2.00% ~ 1.58% 1.13% 1.00% - 0.00% r 1 r r 1 2006 2007 2008 2009 2010 =Costofd
Slide 27: Mortgage loans owned and serviced
Northwest has managed the growth of its mortgage portfolio by selling excess production to FHLMC. MORTGAGE LOANS OWNED AND SERVICED In millions of dollars $3,000.0 - $2,500.0 / $23359 — $2,364.0 $2,435.9 $2.301.6 $2,371.2 $2,000.0 - $1,500.0 - ne $1,000.0 - $8476 $093.8 $1,097.4 $500.0 - $0.0 | . |
Slide 28: Mortgage portfolio yield
The mortgage portfolio has provided an attractive and stable yield during a period of low interest rates... MORTGAGE PORTFOLIO YIELD VS. 10-YEAR TREASURY YIELD AT DECEMBER 31 7.00% 5 6.00% . 5:89% 5.96% 5.96% 578% — 5.00% - 4.71% 4.04% 3.85% OA, s 4.00% 550% OZ, 3.00% 2.25% 2.00% - 1.00% - 0.00% - _
Slide 29: Annual mortgage loan losses
While losses have been minimal... ANNUAL MORTGAGE LOAN LOSSES As a % of total mortgages 0.07% 5 0.06% 0.06% - 0.05% - 0.05% 0.05% 0.04% / 0.04% 0.04% 0.03% - 0.02% - 0.01% - 0.00% T T T T 1 2006 2007 2008 2009 2010 29
Slide 30: Community banking offices
Northwest continued to add community banking offices, expanding our reach into new markets and increasing our presence in existing markets. # OF COMMUNITY BANKING OFFICES 200 160 166 187 171 171 150 | 100 | 50 0 T T 1 1 1 2006 2007 2008 2009 2010 30
Slide 31: ATM locations
We have also enhanced customer convenience by adding ATM locations... # OF ATMS OWNED AND OPERATED 300 » 290 - 287 280 280 276 272 270 - 263 260 - a 250 1 2006 2007 2008 2009 2010 31
Slide 32: Bankline calls and online logins
and serving more people than ever through 125 10 5 oN FD @w L L 1 L telephone and online banking. # OF BANKLINE CALLS AND ONLINE LOGINS In millions 10.7 92 9.7 8.2 : : 2006 2007 2008 2009 2010 32
Slide 33: Online banking users
Online banking users have continued to grow. ONLINE BANKING USERS As a % of total checking accounts 0.6 5 56.4% 50.8% 0.5 + 45.8% 04] 35.9% 39.4% 0.3 + 0.2 | 0.1 5 0 T T 2006 2007 2008 2009 2010 33
Slide 34: Electronic (ACH) transactions
Electronic transactions have continued to escalate... ELECTRONIC (ACH) TRANSACTIONS In millions 7 17.2 18 | é Bie 154 15.9 ia 13.8 12 | 11.6 10 - 8 4 6 4 44 2 4 0 ; r r ; 1 2006 2007 2008 2009 2010
Slide 35: Checks processed vs. card purchases
while our customers have steadily replaced checks with check card purchases. CHECKS PROCESSED VS. CARD PURCHASES In millions 40 5 ag 35.4 342 31.1 29,3 30.4 all 26.6 7 25 | 23.8 20.6 20 + 179 15 - 10 - 5 4 O- ; : i 2006 2007 2008 2009 2010 mChecks processed Check card purchases 38
Slide 36: ATM and debit card income
Electronic transactions have lowered processing costs while enhancing fee income. ATMAND DEBIT CARD INCOME In millions of dollars $16 5 $14.6 $14 sid - ae $11.8 $10 + $9.2 $8) $7.2 $6 $4 + $2 + 5- 1 T 1 1 1 2006 2007 2008 2009 2010 36
Slide 37: Wealth Management
Yoms DAR OL Wealth Management
Slide 38: Personal assets under management
Northwest has achieved significant growth in both personal assets under management and number of clients as we leverage the opportunities to develop such relationships with customers who also use our banking services. PERSONAL ASSETS UNDER MANAGEMENT In millions of dollars $600 5 $558 an on =) Q L $
Slide 39: Number of clients
NUMBER OF CLIENTS 4,603 5,482 6,905 7,714 8,607 2006 2007 2008 2009 2010 39
Slide 40: Wealth management revenue
The increased amount of assets under management continues to provide a source of fee income. WEALTH MANAGEMENT REVENUE In millions of dollars 4.0 4.0 5 : 3.5 5 3.0 5 2.5 5 2.0 5 1.5 + 1.0 5 0.5 5 0.0 + 2007 2008 2009 2010 40
Slide 41: Operating Trends
Operating Trends 41
Slide 42: Financial Condition
Financial Conditio 2010 2009 Net Change %. Assets $8,148,155,000 $8,025,298,000 $122,857,000 1.5% Cash and Investments $2,027,716,000 $2,174,879,000 ($147,163,000) (6.8%) Loans Receivable $5,534,005,000 $5,299.465,000 $234,540,000 4.4% Allowance for Loan Losses $76,412,000 $70,403,000 $6,009,000 8.5
Slide 43: Composition of Loan Portfolio
Composition of Loan Portfolio December December December December December December 2005 2006 2007 2008 2009 2010 (One-to-four family 59.5% 53.5% 48.9% f (ulti-family and Commercial R.E. 12.6% 15.6% 18.3% ‘onsumer (including home equity) 24.6% 25.7% 25.4% ommercial Business 3.3% 5.2% TA% December 20
Slide 44: Loan Growth
Loan Growth $6,000 5 saga $5,197 $5,299 S534 $5,000 | saan $4555 g4.450 7 $4,000 | woe Ee $3,000 | $2877 859° 5 $2,000 | Ss $1,000 $3: $0 ss e ¢ € é @ wy eg oS Sf of of SS SS SEE FEI IF II K 9 =Commercial Loans = Gross Loans
Slide 45: Composition of Deposits
Composition of Deposits December December December December December December 2005 2006 2007 2008 2009 2010 19.5% 21.8% 22.3% 23.6% 13.4% 15.1% 16.4% 18.2% 114% 12.3% 14.3% 14.6% 15.6% 52.4% 55.3% 54.8% 48.8% 46.7% 42.6% December 2005 December 2010 Checking 18.3% Checking 23.6% Money Market 15.6%
Slide 46: Deposit Growth
Deposit Growth $7.0B $6.0B $5.08 $4.08 $3.0B $20B $1.08 $0.08 $5.8 ss2 sa2 ssa 84 85 a 7 aailillll| | SEE SEES EP EES EES SK 9 eo Growth Between 2009 and 2010 Deposits Deposit Growth (S000) (%) Non-interest Bearing Demand $181,270 46.0% Interest-bearing Demand $76,137 10.8% Savings Deposits $288,948
Slide 47: 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 48: Asset Quality
Asset Quality 48
Slide 49: Reserve & Charge-Offs History
Reserve & Charge-Offs Histo 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 EISL
Slide 50: Delinquent Loans
Delinguent Loans 4.00% 36% 3.5% 3.7% sis 2.5% 19x 1.8% 2.2% 21% 2.00% oy a 0.4% 0.8% ome 1.00% — ie x 13% ae 13% 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% 2.0% 67% sen 0% 83% 5.4% a 55% Sa 4% 48%, .o% 4
Slide 51: Loan Breakdown By State
Loan Breakdown By State = 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-to-four family mortgage Pennsylvania 17,891 1.463 134 4573 4,768 92
Slide 52: Investment Security Portfolio Composition
Investment Security Portfolio Composition at December 31, 2010 % of Description Amortized Cost Portfolio Unrealized gain/(loss) Mortgage-backed Securities and CMOs: FHLMC $328,754,000 25.2% $7,352,000 FNMA $347 ,993,000 26.7% $7,469,000 GNMA $219,589,000 16.8% $4,242,000 SBA $23,094,000 1.8% aa Othe
Slide 53: Investment Portfolio - Continued
Northwest Bancshares, Inc. and Subsidiaries Investment Portfolio — Continued Book Value As a % of 12/31/2010 Book Value Municipal securities by state: Pennsylvania School district $140,162,000 47.58% General obligation $59,725,000 20.28% Revenue bonds $16,664,000 5.66% Total Pennsylvania $216,551 ,0
Slide 54: Stock Performance and Per Share Information
Stock Performance and Per Share Information
Slide 55: Price Performance Since IPO
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) — SEP 500 (+287.45%) — SNL US. Bonk (+238.57%) 1,009) 800] 609| 400] Total Return (%) 200
Slide 56: 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 57: 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 58: 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 59: Strategic Direction
Strategic Direction 59
Slide 60: 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 61: Northwest Savings Bank
M NORTHWEST SAVINGS BANK Where people make the difference.
Slide 62: Recent Awards
Recent Awards 62
Slide 63: Forbes recognizes Northwest Bancshares
Forbes recognizes Northwest Bancshares, Inc. as “America’s 23 strongest bank” 63
Slide 64: Keefe, Bruyette & Woods recognition
Keefe, Bruyette & Woods recognizes Northwest Bancshares, Inc. as “One of America’s 40 Top Performing Banks Over the Past Ten Years”
Slide 65: J.D. Power 2010 Retail Banking Customer Satisfaction Study
J.D, Power and Associates 2010 Retail Banking Customer Satisfaction Study NORTHWEST SAVINGS BANK 5T IN CUSTOMER SATISFACTION IN MID-ATLANTIC REGION 65
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