Northwest Bancshares, Inc. Announces Second Quarter 2024 net income of $5 million, or $0.04 per diluted share

About this update from Northwest Bancshares, Inc.

The Company's adjusted net operating income was $35 million , or $0.27 per diluted share (1) Previously announced balance sheet restructure successfully completed Net interest margin expands 10 basis points to 3.20% Credit quality remains strong 119th consecutive quarterly dividend of $0.20 per share declared COLUMBUS, Ohio , July 23, 2024 /PRNewswire/ -- Northwest Bancshares, Inc. , (the "Company"), (NasdaqGS: NWBI) announced net income for the quarter ended June 30, 2024 of $5 million , or $0.04 per diluted share. This represents a decrease of $28 million compared to the same quarter last year, when net income was $33 million , or $0.26 per diluted share, and a decrease of $24 million compared to the prior quarter, when net income was $29 million , or $0.23 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended June 30, 2024 were 1.24% and 0.13% compared to 8.72% and 0.93% for the same quarter last year and 7.57% and 0.81% from the prior quarter. Excluding loss on the sale of investments of $28 million , net of tax, and restructuring expense of $1 million , net of tax, the Company's adjusted net operating income was $35 million , or $0.27 per diluted share for the quarter ended June 30, 2024 . This represents an increase of $1 million from the same quarter last year, when adjusted net operating income was $34 million , or $0.27 per diluted share, and an increase of $5 million compared to the prior quarter, where adjusted net operating income was $30 million , or $0.23 per diluted share. The adjusted annualized returns on average shareholders' equity and average assets for the quarter ended June 30, 2024 were 9.00% and 0.96% compared to 9.02% and 0.96% for the same quarter last year and 7.75% and 0.83% from the prior quarter. The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share payable on August 14, 2024 to shareholders of record as of August 2, 2024 . This is the 119th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of June 30, 2024 , this represents an annualized dividend yield of approximately 6.9%. In the quarter, as previously disclosed, the Company repositioned its security portfolio by selling 15% of its investment securities with proceeds totaling $276 million at a pre-tax loss of $39 million , or $28 million after tax. The proceeds of the sale were immediately used to repay short-term borrowings. In addition, $258 million has already been invested into securities netting a 420 basis point higher yield. The Company currently expects to earn-back the loss over the next three years. Louis J. Torchio , President and CEO, added, "Our core earnings this quarter reflect our commitment to responsible growth, with particularly strong performance in our commercial division. I'm especially proud of the flawless execution of our previously announced securities restructuring, which has yielded results surpassing our initial projections. This success underscores our team's ability to implement strategic initiatives effectively while maintaining focus on our core business objectives." "Performance this quarter highlights the significant progress in our commercial transformation strategy. We've seen solid loan growth, particularly in commercial and industrial originations, which aligns with our strategic focus. This targeted growth outpaces less preferred categories in the current market, such as commercial office space or long-term health care. Our success in this area not only validates our strategic direction but also positions us well for sustained, quality growth in the commercial sector." (1) See reconciliation of non-GAAP financial measures for additional information relating to these items. Balance Sheet Highlights Dollars in thousands Change 2Q24 vs. 2Q24 1Q24 2Q23 1Q24 2Q23 Average loans receivable $ 11,368,749 11,345,308 11,065,660 0.2 % 2.7 % Average investments 2,021,347 2,051,058 2,233,987 (1.4) % (9.5) % Average deposits 12,086,362 11,887,954 11,420,702 1.7 % 5.8 % Average borrowed funds 323,191 469,697 837,358 (31.2) % (61.4) % Average loans receivable increased $303 million from the quarter ended June 30, 2023 driven by our commercial banking portfolio, which grew by $631 million in total, including a $444 million increase in our commercial and industrial portfolio as we have continued to build-out our commercial lending verticals. Compared to the first quarter of 2024, average loans receivable increased by $23 million, also driven by growth in the commercial banking portfolio. Average investments declined $213 million from the quarter ended June 30, 2023 and $30 million from the quarter ended March 31, 2024 . The decline from the prior year was driven by the investment portfolio restructure described above and from lack of reinvestment of cash flow over the past year. The decline in investments from the prior quarter is expected to be temporary and was also driven by the timing of the investment portfolio repositioning activity. Average deposits grew $666 million from the quarter ended June 30, 2023 , driven by a $1 .1 billion increase in our average time deposits as we continued competitively positioning our deposit products. This increase was partially offset by a decrease in money market balances as customers shifted balances into higher yielding time deposit accounts. Compared to the first quarter of 2024, average deposits grew $198 million, also driven by an increase in time deposits. Average borrowings saw a significant reduction of $514 million compared to the quarter end June 30, 2023 and $147 million compared to the quarter ended March 31, 2024 . The decrease in average borrowings is primarily attributable to the strategic pay-down of wholesale borrowings. This decrease was made possible by our repositioning of our securities portfolio as well as a substantial increase in cash reserves resulting from the notable rise in the average balance of deposits noted above. Income Statement Highlights Dollars in thousands Change 2Q24 vs. 2Q24 1Q24 2Q23 1Q24 2Q23 Interest income $ 166,854 160,239 143,996 4.1 % 15.9 % Interest expense 60,013 57,001 35,447 5.3 % 69.3 % Net interest income $ 106,841 103,238 108,549 3.5 % (1.6) % Net interest margin 3.20 % 3.10 % 3.28 % Net interest income decreased $2 million and net interest margin decreased to 3.20% for the quarter ended June 30, 2024 from 3.28% for the quarter ended June 30, 2023 . This decrease in net interest income resulted primarily from: A $23 million increase in interest income that was the result of cash and marketable securities being redeployed into higher yielding loans. Driven by higher market interest rates, the average yield on loans improved to 5.47% for the quarter ended June 30, 2024 from 4.83% for the quarter ended June 30, 2023 . A $25 million increase in interest expense more than offset the increase in interest income as the result of higher costs of deposits due to the higher interest rate environment and competitive pressure for liquidity. The cost of interest-bearing liabilities increased to 2.40% for the quarter ended June 30, 2024 from 1.47% for the quarter ended June 30, 2023 . Compared to the quarter ended March 31, 2024 , net interest income increased $4 million and net interest margin increased to 3.20% for the quarter ended June 30, 2024 . This increase in net interest income resulted from the following: A $7 million increase in interest income driven by higher interest income on loans receivable as both the average balance and average yield increased compared to the prior quarter. The average yield on loans improved to 5.47% from 5.33% for the quarter ended March 31, 2024 . Partially offsetting the increase in interest income was a $3 million increase in interest expense due to increases in both the average balance and average yield of interest-earning deposits. The cost of interest-bearing liabilities increased to 2.40% from 2.28% for the quarter ended March 31, 2024 . Dollars in thousands Change 2Q24 vs. 2Q24 1Q24 2Q23 1Q24 2Q23 Provision for credit losses - loans $ 2,169 4,234 6,010 (48.8) % (63.9) % Provision for credit losses - unfunded commitments (2,539) (799) 2,920 217.8 % (187.0) % Total provision for credit losses expense $ (370) 3,435 8,930 (110.8) % (104.1) % The total provision for credit losses for the quarter ended June 30, 2024 was a credit of $0.4 million primarily driven by improvements in the economic forecasts coupled with a decline in our reserves for unfunded commitments in the current period. This decline is based on the timing of origination and funding of commercial construction loans and lines of credit. Additionally, the Company continued to experience low levels of classified loans with a slight increase to $257 million or 2.26% of total loans at June 30, 2024 from $214 million , or 1.90% of total loans, at June 30, 2023 and $229 million , or 1.99% of total loans, at March 31, 2024 . Dollars in thousands Change 2Q24 vs. 2Q24 1Q24 2Q23 1Q24 2Q23 Noninterest income: Loss on sale of investments $ (39,413) — (8,306) NA 374.5 % Gain on sale of mortgage servicing rights — — 8,305 NA (100.0) % Gain on sale of SBA loans 1,457 873 832 66.9 % 75.1 % Service charges and fees 15,527 15,523 14,833 — % 4.7 % Trust and other financial services income 7,566 7,127 6,866 6.2 % 10.2 % Gain on real estate owned, net 487 57 785 754.4 % (38.0) % Income from bank-owned life insurance 1,371 1,502 1,304 (8.7) % 5.1 % Mortgage banking income 901 452 1,028 99.3 % (12.4) % Other operating income 3,255 2,429 4,150 34.0 % (21.6) % Total noninterest (loss)/income (8,849) 27,963 29,797 (131.6) % (129.7) % Noninterest income for the quarter ended June 30, 2024 showed a loss of $9 million inclusive of a $39 million loss on the sale of investment securities, excluding the loss on sale of securities net interest income grew by $1 million , or 3%, from the quarter ended June 30, 2023 and $3 million , or 9% from the quarter ended March 31, 2024 . In addition, in the prior year period we realized a gain on sale of mortgage servicing rights of $8 million and an offsetting loss on the sale of investments of $8 million . Dollars in thousands Change 2Q24 vs. 2Q24 1Q24 2Q23 1Q24 2Q23 Noninterest expense: Personnel expense $ 53,531 51,540 47,650 3.9 % 12.3 % Non personnel expense 38,889 38,484 38,208 1.1 % 1.8 % Total noninterest expense $ 92,420 90,024 85,858 2.7 % 7.6 % Noninterest expense increased from the quarter ended June 30, 2023 due to a $6 million increase in personnel expenses driven by the build-out of the commercial business and related credit, risk management and internal audit support functions over the past year. Compared to the quarter ended March 31, 2024 , noninterest expense increased due to a $2 million increase in personnel expense driven by an annual salary merit increase, additional contracted employees utilized during the quarter and an increase in incentive compensation expenses. Dollars in thousands Change 2Q24 vs. 2Q24 1Q24 2Q23 1Q24 2Q23 Income before income taxes $ 5,942 37,742 43,558 (84.3) % (86.4) % Income tax expense 1,195 8,579 10,514 (86.1) % (88.6) % Net income $ 4,747 29,163 33,044 (83.7) % (85.6) % The provision for income taxes decreased by $9 million from the quarter ended June 30, 2023 and $7 million from the quarter ended March 31, 2024 primarily due to lower income before income taxes. Net income declined compared to both the quarter ended June 30, 2023 and the quarter ended March 31, 2024 due to loss on sale of investments from the current period balance sheet restructuring as well as the additional factors discussed above. Headquartered in Columbus, Ohio , Northwest Bancshares, Inc. is the bank holding company of Northwest Bank . Founded in 1896 Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, as well as employee benefits and wealth management services. As of June 30, 2024 , Northwest operated 131 full-service financial centers and eight free standing drive-through facilities in Pennsylvania , New York, Ohio and Indiana . Northwest Bancshares, Inc.'s common stock is listed on the NASDAQ Global Select Market ("NWBI"). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com . Forward-Looking Statements - This release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including inflation and an increase in non-performing loans; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses or the ability to complete sales transactions; (7) increased risk associated with commercial real-estate and business loans; (8) changes in liquidity, including the size and composition of our deposit portfolio; (9) reduction in the value of our goodwill and other intangible assets; and (10) the effect of any pandemic, including COVID-19, war or act of terrorism. Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release. Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Financial Condition (Unaudited) (dollars in thousands, except per share amounts) June 30 , 2024 December 31 , 2023 June 30 , 2023 Assets Cash and cash equivalents $ 228,433 122,260 127,627 Marketable securities available-for-sale (amortized cost of $1,202,354 , $1,240,003 and $1,287,101 , respectively) 1,029,191 1,043,359 1,073,952 Marketable securities held-to-maturity (fair value of $663,292 , $699,506 and $718,676 , respectively) 784,208 814,839 847,845 Total cash and cash equivalents and marketable securities 2,041,832 1,980,458 2,049,424 Loans held-for-sale 9,445 8,768 16,077 Residential mortgage loans 3,315,303 3,419,417 3,479,080 Home equity loans 1,180,486 1,227,858 1,276,062 Consumer loans 2,080,058 2,126,027 2,201,062 Commercial real estate loans 3,026,958 2,974,010 2,895,224 Commercial loans 1,742,114 1,658,729 1,403,726 Total loans receivable 11,354,364 11,414,809 11,271,231 Allowance for credit losses (125,070) (125,243) (124,423) Loans receivable, net 11,229,294 11,289,566 11,146,808 FHLB stock, at cost 20,842 30,146 44,613 Accrued interest receivable 48,739 47,353 37,281 Real estate owned, net 74 104 371 Premises and equipment, net 128,208 138,838 139,915 Bank-owned life insurance 253,890 251,895 257,614 Goodwill 380,997 380,997 380,997 Other intangible assets, net 3,954 5,290 6,809 Other assets 277,723 294,458 227,659 Total assets $ 14,385,553 14,419,105 14,291,491 Liabilities and shareholders' equity Liabilities Noninterest-bearing demand deposits $ 2,581,699 2,669,023 2,820,563 Interest-bearing demand deposits 2,565,750 2,634,546 2,577,653 Money market deposit accounts 1,964,841 1,968,218 2,154,253 Savings deposits 2,148,727 2,105,234 2,120,215 Time deposits 2,826,362 2,602,881 1,989,711 Total deposits 12,087,379 11,979,902 11,662,395 Borrowed funds 242,363 398,895 632,313 Subordinated debt 114,364 114,189 114,015 Junior subordinated debentures 129,703 129,574 129,444 Advances by borrowers for taxes and insurance 52,271 45,253 57,143 Accrued interest payable 21,423 13,669 4,936 Other liabilities 181,452 186,306 179,744 Total liabilities 12,828,955 12,867,788 12,779,990 Shareholders' equity Preferred stock, $0.01 par value: 50,000,000 shares authorized, no shares issued — — — Common stock, $0.01 par value: 500,000,000 shares authorized, 127,307,997, 127,110,453 and 127,088,963 shares issued and outstanding, respectively 1,273 1,271 1,271 Additional paid-in capital 1,027,703 1,024,852 1,022,189 Retained earnings 657,706 674,686 657,292 Accumulated other comprehensive loss (130,084) (149,492) (169,251) Total shareholders' equity 1,556,598 1,551,317 1,511,501 Total liabilities and shareholders' equity $ 14,385,553 14,419,105 14,291,491 Equity to assets 10.82 % 10.76 % 10.58 % Tangible common equity to assets* 8.37 % 8.30 % 8.08 % Book value per share $ 12.23 12.20 11.89 Tangible book value per share* $ 9.20 9.17 8.84 Closing market price per share $ 11.55 12.48 10.60 Full time equivalent employees 1,991 2,098 2,025 Number of banking offices 139 142 142 * Excludes goodwill and other intangible assets (non-GAAP). See reconciliation of non-GAAP financial measures for additional information relating to these items. Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) (dollars in thousands, except per share amounts) Quarter ended June 30 , 2024 March 31 , 2024 December 31 , 2023 September 30 , 2023 June 30 , 2023 Interest income: Loans receivable $ 153,954 149,571 146,523 140,667 132,724 Mortgage-backed securities 9,426 7,944 7,951 8,072 8,326 Taxable investment securities 728 794 786 786 841 Tax-free investment securities 457 491 492 491 667 FHLB stock dividends 498 607 666 668 844 Interest-earning deposits 1,791 832 970 914 594 Total interest income 166,854 160,239 157,388 151,598 143,996 Interest expense: Deposits 52,754 47,686 40,600 31,688 21,817 Borrowed funds 7,259 9,315 10,486 11,542 13,630 Total interest expense 60,013 57,001 51,086 43,230 35,447 Net interest income 106,841 103,238 106,302 108,368 108,549 Provision for credit losses - loans 2,169 4,234 3,801 3,983 6,010 Provision for credit losses - unfunded commitments (2,539) (799) 4,145 (2,981) 2,920 Net interest income after provision for credit losses 107,211 99,803 98,356 107,366 99,619 Noninterest income: Loss on sale of investments (39,413) — (1) — (8,306) Gain on sale of mortgage servicing rights — — — — 8,305 Gain on sale of SBA loans 1,457 873 388 301 832 Gain on sale of loans — — 726 — — Service charges and fees 15,527 15,523 15,922 15,270 14,833 Trust and other financial services income 7,566 7,127 6,884 7,085 6,866 Gain on real estate owned, net 487 57 1,084 29 785 Income from bank-owned life insurance 1,371 1,502 1,454 4,561 1,304 Mortgage banking income 901 452 247 632 1,028 Other operating income 3,255 2,429 2,465 3,010 4,150 Total noninterest (loss)/income (8,849) 27,963 29,169 30,888 29,797 Noninterest expense: Compensation and employee benefits 53,531 51,540 50,194 51,243 47,650 Premises and occupancy costs 7,464 7,627 7,049 7,052 7,579 Office operations 3,819 2,767 3,747 3,398 2,800 Collections expense 406 336 328 551 429 Processing expenses 14,695 14,725 15,017 14,672 14,648 Marketing expenses 2,410 2,149 1,317 2,379 2,856 Federal deposit insurance premiums 2,865 3,023 2,643 2,341 2,064 Professional services 3,728 4,065 6,255 3,002 3,804 Amortization of intangible assets 635 701 724 795 842 Real estate owned expense 57 66 51 141 83 Merger, asset disposition and restructuring expense 1,915 955 2,354 — 1,593 Other expenses 895 2,070 997 1,996 1,510 Total noninterest expense 92,420 90,024 90,676 87,570 85,858 Income before income taxes 5,942 37,742 36,849 50,684 43,558 Income tax expense 1,195 8,579 7,835 11,464 10,514 Net income $ 4,747 29,163 29,014 39,220 33,044 Basic earnings per share $ 0.04 0.23 0.23 0.31 0.26 Diluted earnings per share $ 0.04 0.23 0.23 0.31 0.26 Annualized return on average equity 1.24 % 7.57 % 7.64 % 10.27 % 8.72 % Annualized return on average assets 0.13 % 0.81 % 0.80 % 1.08 % 0.93 % Annualized return on average tangible common equity * 1.65 % 10.08 % 10.28 % 13.80 % 11.71 % Efficiency ratio 94.31 % 68.62 % 66.93 % 62.88 % 62.06 % Efficiency ratio, excluding certain items ** 65.41 % 67.35 % 64.66 % 62.31 % 60.30 % Annualized noninterest expense to average assets 2.57 % 2.51 % 2.51 % 2.42 % 2.42 % Annualized noninterest expense to average assets, excluding certain items** 2.50 % 2.47 % 2.43 % 2.39 % 2.35 % * Excludes goodwill and other intangible assets (non-GAAP). See reconciliation of non-GAAP financial measures for additional information relating to these items. ** Excludes loss on sale of investments, gain on sale of mortgage servicing rights, amortization of intangible assets and merger, asset disposition and restructuring expenses (non-GAAP). See reconciliation of non-GAAP financial measures for additional information relating to these items. Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) (dollars in thousands, except per share amounts) Six months ended June 30 , 2024 2023 Interest income: Loans receivable $ 303,525 256,469 Mortgage-backed securities 17,370 16,863 Taxable investment securities 1,522 1,686 Tax-free investment securities 948 1,367 FHLB stock dividends 1,105 1,534 Interest-earning deposits 2,623 1,017 Total interest income 327,093 278,936 Interest expense: Deposits 100,440 33,055 Borrowed funds 16,574 24,868 Total interest expense 117,014 57,923 Net interest income 210,079 221,013 Provision for credit losses - loans 6,403 10,880 Provision for credit losses - unfunded commitments (3,338) 3,046 Net interest income after provision for credit losses 207,014 207,087 Noninterest income: Loss on sale of investments (39,413) (8,306) Gain on sale of mortgage servicing rights — 8,305 Gain on sale of SBA loans 2,330 1,111 Service charges and fees 31,050 28,022 Trust and other financial services income 14,693 13,315 Gain on real estate owned, net 544 893 Income from bank-owned life insurance 2,873 2,573 Mortgage banking income 1,353 1,552 Other operating income 5,684 6,301 Total noninterest income 19,114 53,766 Noninterest expense: Compensation and employee benefits 105,071 94,254 Premises and occupancy costs 15,091 15,050 Office operations 6,586 5,810 Collections expense 742 816 Processing expenses 29,420 28,998 Marketing expenses 4,559 5,748 Federal deposit insurance premiums 5,888 4,287 Professional services 7,793 8,562 Amortization of intangible assets 1,336 1,751 Real estate owned expense 123 264 Merger, asset disposition and restructuring expense 2,870 4,395 Other expenses 2,965 3,373 Total noninterest expense 182,444 173,308 Income before income taxes 43,684 87,545 Income tax expense 9,774 20,822 Net income $ 33,910 66,723 Basic earnings per share $ 0.27 0.53 Diluted earnings per share $ 0.27 0.52 Annualized return on average equity 4.41 % 8.91 % Annualized return on average assets 0.47 % 0.95 % Annualized return on tangible common equity * 5.88 % 12.01 % Efficiency ratio 79.60 % 63.07 % Efficiency ratio, excluding certain items ** 66.36 % 60.83 % Annualized noninterest expense to average assets 2.54 % 2.46 % Annualized noninterest expense to average assets, excluding certain items ** 2.48 % 2.38 % * Excludes goodwill and other intangible assets (non-GAAP). See reconciliation of non-GAAP financial measures for additional information relating to these items. ** Excludes loss on sale of investments, gain on sale of mortgage servicing rights, amortization of intangible assets and merger, asset disposition and restructuring expenses (non-GAAP). See reconciliation of non-GAAP financial measures for additional information relating to these items. Northwest Bancshares, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures (Unaudited) * (dollars in thousands, except per share amounts) Quarter ended Six months ended June 30 , June 30, 2024 March 31, 2024 June 30, 2023 2024 2023 Reconciliation of net income to adjusted net operating income: Net income (GAAP) $ 4,747 29,163 33,044 33,910 66,723 Non-GAAP adjustments Add: merger, asset disposition and restructuring expense 1,915 955 1,593 2,870 4,395 Add: loss on the sale of investments 39,413 — 8,306 39,413 8,306 Less: gain on sale of mortgage servicing rights — — (8,305) — (8,305) Less: tax benefit of non-GAAP adjustments (11,572) (267) (446) (11,839) (1,231) Adjusted net operating income (non-GAAP) $ 34,503 29,851 34,192 64,354 69,888 Diluted earnings per share (GAAP) $ 0.04 0.23 0.26 0.27 0.52 Diluted adjusted operating earnings per share (non-GAAP) $ 0.27 0.23 0.27 0.51 0.55 Average equity $ 1,541,434 1,549,870 1,519,990 1,545,651 1,509,466 Average assets 14,458,592 14,408,612 14,245,917 14,433,602 14,184,050 Annualized return on average equity (GAAP) 1.24 % 7.57 % 8.72 % 4.41 % 8.91 % Annualized return on average assets (GAAP) 0.13 % 0.81 % 0.93 % 0.47 % 0.95 % Annualized return on average equity, excluding merger, asset disposition and restructuring expense, loss on the sale of investments and gain on sale of mortgage servicing rights, net of tax (non-GAAP) 9.00 % 7.75 % 9.02 % 8.37 % 9.34 % Annualized return on average assets, excluding merger, asset disposition and restructuring expense, loss on sale of investments, and gain on sale of mortgage servicing rights, net of tax (non-GAAP) 0.96 % 0.83 % 0.96 % 0.90 % 0.99 % The following non-GAAP financial measures used by the Company provide information useful to investors in understanding our operating performance and trends, and facilitate comparisons with the performance of our peers. The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company's Consolidated Statements of Financial Condition. June 30 , 2024 December 31 , 2023 June 30 , 2023 Tangible common equity to assets Total shareholders' equity $ 1,556,598 1,551,317 1,511,501 Less: goodwill and intangible assets (384,951) (386,287) (387,806) Tangible common equity $ 1,171,647 1,165,030 1,123,695 Total assets $ 14,385,553 14,419,105 14,291,491 Less: goodwill and intangible assets (384,951) (386,287) (387,806) Tangible assets $ 14,000,602 14,032,818 13,903,685 Tangible common equity to tangible assets 8.37 % 8.30 % 8.08 % Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments Tangible common equity $ 1,171,647 1,165,030 1,123,695 Less: unrealized losses on held to maturity investments (120,916) (115,334) (129,169) Add: deferred taxes on unrealized losses on held to maturity investments 33,856 32,294 36,167 Tangible common equity, including unrealized losses on held-to-maturity investments $ 1,084,587 1,081,990 1,030,693 Tangible assets $ 14,000,602 14,032,818 13,903,685 Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments 7.75 % 7.71 % 7.41 % Tangible book value per share Tangible common equity $ 1,171,647 1,165,030 1,123,695 Common shares outstanding 127,307,997 127,110,453 127,088,963 Tangible book value per share 9.20 9.17 8.84 Northwest Bancshares, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures (Unaudited) * (dollars in thousands, except per share amounts) The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company's Consolidated Statements of Income. Quarter ended Six months ended June 30 , June 30 , 2024 March 31 , 2024 December 31 , 2023 September 30 , 2023 June 30 , 2023 2024 2023 Annualized return on average tangible common equity Net income $ 4,747 29,163 29,014 39,220 33,044 33,910 66,723 Average shareholders' equity 1,541,434 1,549,870 1,506,895 1,515,287 1,519,990 1,545,651 1,509,466 Less: average goodwill and intangible assets (385,364) (386,038) (386,761) (387,523) (388,354) (385,701) (388,793) Average tangible common equity $ 1,156,070 1,163,832 1,120,134 1,127,764 1,131,636 1,159,950 1,120,673 Annualized return on average tangible common equity 1.65 % 10.08 % 10.28 % 13.80 % 11.71 % 5.88 % 12.01 % Efficiency ratio, excluding loss on the sale of investments, gain on the sale of mortgage servicing rights, amortization and merger, asset disposition and restructuring expenses Non-interest expense $ 92,420 90,024 90,676 87,570 85,858 182,444 173,308 Less: amortization expense (635) (701) (724) (795) (842) (1,336) (1,751) Less: merger, asset disposition and restructuring expenses (1,915) (955) (2,354) — (1,593) (2,870) (4,395) Non-interest expense, excluding amortization and merger, assets disposition and restructuring expenses $ 89,870 88,368 87,598 86,775 83,423 178,238 167,162 Net interest income $ 106,841 103,238 106,302 108,368 108,549 210,079 221,013 Non-interest income (8,849) 27,963 29,169 30,888 29,797 19,114 53,766 Add: loss on the sale of investments 39,413 — 1 — 8,306 39,413 8,306 Less: gain on sale of mortgage servicing rights — — — — — — (8,305) — (8,305) Net interest income plus non-interest income, excluding loss on sale of investments and gain on sale of mortgage servicing rights $ 137,405 131,201 135,472 139,256 138,347 268,606 274,780 Efficiency ratio, excluding loss on sale of investments, gain on sale of mortgage servicing rights, amortization and merger, asset disposition and restructuring expenses 65.41 % 67.35 % 64.66 % 62.31 % 60.30 % 66.36 % 60.83 % Annualized non-interest expense to average assets, excluding amortization and merger, asset disposition and restructuring expense Non-interest expense excluding amortization and merger, asset disposition and restructuring expenses $ 89,870 88,368 87,598 86,775 83,423 178,238 167,162 Average assets 14,458,592 14,408,612 14,329,020 14,379,323 14,245,917 14,433,602 14,184,050 Annualized non-interest expense to average assets, excluding amortization and merger, asset disposition and restructuring expense 2.50 % 2.47 % 2.43 % 2.39 % 2.35 % 2.48 % 2.38 % * The table summarizes the Company's results from operations on a GAAP basis and on an operating (non-GAAP) basis for the periods indicated. Operating results exclude merger, asset disposition and restructuring expense, loss on sale of investments and gain on sale of mortgage servicing rights. The net tax effect was calculated using statutory tax rates of approximately 28.0%. The Company believes this non-GAAP presentation provides a meaningful comparison of operational performance and facilitates a more effective evaluation and comparison of results to assess performance in relation to ongoing operations. Northwest Bancshares, Inc. and Subsidiaries Deposits (Unaudited) (dollars in thousands) Generally, deposits in excess of $250,000 are not federally insured. The following table provides details regarding the Company's uninsured deposits portfolio: As of June 30, 2024 Balance Percent of total deposits Number of relationships Uninsured deposits per the Call Report (1) $ 3,019,897 24.98 % 5,062 Less intercompany deposit accounts 1,163,566 9.62 % 12 Less collateralized deposit accounts 468,815 3.88 % 243 Uninsured deposits excluding intercompany and collateralized accounts $ 1,387,516 11.48 % 4,807 (1) Uninsured deposits presented may be different from actual amounts due to titling of accounts. Our largest uninsured depositor, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $19.4 million , or 0.16% of total deposits, as of June 30, 2024 . Our top ten largest uninsured depositors, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $102 million , or 0.84% of total deposits, as of June 30, 2024 . The average uninsured deposit account balance, excluding intercompany and collateralized accounts, was $289,000 as of June 30, 2024 . The following table provides additional details for the Company's deposit portfolio: As of June 30, 2024 Balance Percent of total deposits Number of accounts Personal noninterest bearing demand deposits $ 1,350,520 11.2 % 286,513 Business noninterest bearing demand deposits 1,231,179 10.2 % 43,499 Personal interest-bearing demand deposits 1,396,825 11.5 % 57,185 Business interest-bearing demand deposits 1,168,925 9.7 % 7,786 Personal money market deposits 1,390,162 11.5 % 24,906 Business money market deposits 574,679 4.7 % 2,777 Savings deposits 2,148,727 17.8 % 187,406 Time deposits 2,826,362 23.4 % 81,844 Total deposits $ 12,087,379 100.0 % 691,916 Our average deposit account balance as of June 30, 2024 was $17,000 . The Company's insured cash sweep deposit balance was $394 million as of June 30, 2024 . The following table provides additional details regarding the Company's deposit portfolio over time: 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 3/31/2024 6/30/2024 Personal noninterest bearing demand deposits $ 1,412,227 1,428,232 1,397,167 1,375,144 1,357,875 1,369,294 1,350,520 Business noninterest bearing demand deposits 1,581,016 1,467,860 1,423,396 1,399,147 1,311,148 1,249,085 1,231,179 Personal interest-bearing demand deposits 1,718,806 1,627,546 1,535,254 1,477,617 1,464,058 1,427,140 1,396,825 Business interest-bearing demand deposits 499,059 466,105 624,252 689,914 812,433 805,069 815,358 Municipal demand deposits 468,566 447,852 418,147 430,549 358,055 325,657 353,567 Personal money market deposits 1,832,583 1,626,614 1,511,652 1,463,689 1,435,939 1,393,532 1,390,162 Business money market deposits 624,986 701,436 642,601 579,124 532,279 559,005 574,679 Savings deposits 2,275,020 2,194,743 2,120,215 2,116,360 2,105,234 2,156,048 2,148,727 Time deposits 1,052,285 1,576,791 1,989,711 2,258,338 2,602,881 2,786,814 2,826,362 Total deposits $ 11,464,548 11,537,179 11,662,395 11,789,882 11,979,902 12,071,644 12,087,379 Northwest Bancshares, Inc. and Subsidiaries Regulatory Capital Requirements (Unaudited) (dollars in thousands) At June 30, 2024 Actual Minimum capital requirements (1) Well capitalized requirements Amount Ratio Amount Ratio Amount Ratio Total capital (to risk weighted assets) Northwest Bancshares, Inc. $ 1,784,604 16.674 % $ 1,123,831 10.500 % $ 1,070,315 10.000 % Northwest Bank 1,537,783 14.380 % 1,122,827 10.500 % 1,069,359 10.000 % Tier 1 capital (to risk weighted assets) Northwest Bancshares, Inc. 1,536,552 14.356 % 909,768 8.500 % 856,252 8.000 % Northwest Bank 1,404,095 13.130 % 908,955 8.500 % 855,487 8.000 % Common equity tier 1 capital (to risk weighted assets) Northwest Bancshares, Inc. 1,410,837 13.182 % 749,220 7.000 % 695,705 6.500 % Northwest Bank 1,404,095 13.130 % 748,551 7.000 % 695,083 6.500 % Tier 1 capital (leverage) (to average assets) Northwest Bancshares, Inc. 1,536,552 10.654 % 576,913 4.000 % 721,142 5.000 % Northwest Bank 1,404,095 9.742 % 576,521 4.000 % 720,651 5.000 % (1) Amounts and ratios include the capital conservation buffer of 2.5%, which does not apply to Tier 1 capital to average assets (leverage ratio). For further information related to the capital conservation buffer, see "Item 1. Business - Supervision and Regulation" of our 2023 Annual Report on Form 10-K. Northwest Bancshares, Inc. and Subsidiaries Marketable Securities (Unaudited) (dollars in thousands) June 30, 2024 Marketable securities available-for-sale Amortized cost Gross unrealized holding gains Gross unrealized holding losses Fair value Weighted average duration Debt issued by the U.S. government and agencies: Due after ten years $ 47,263 — (10,292) 36,971 6.08 Debt issued by government sponsored enterprises: Due after one year through five years 185 — (5) 180 1.19 Municipal securities: Due after one year through five years 880 8 (3) 885 1.83 Due after five years through ten years 9,157 5 (1,565) 7,597 7.89 Due after ten years 58,872 13 (8,626) 50,259 10.17 Corporate debt issues: Due after five years through ten years 14,373 20 (886) 13,507 4.79 Due after ten years 3,250 — — 3,250 10.04 Mortgage-backed agency securities: Fixed rate pass-through 228,855 83 (16,874) 212,064 7.64 Variable rate pass-through 4,093 24 (13) 4,104 3.59 Fixed rate agency CMOs 789,673 293 (135,258) 654,708 4.72 Variable rate agency CMOs 45,753 38 (125) 45,666 7.18 Total mortgage-backed agency securities 1,068,374 438 (152,270) 916,542 5.52 Total marketable securities available-for-sale $ 1,202,354 484 (173,647) 1,029,191 5.78 Marketable securities held-to-maturity Government sponsored Due after one year through five years $ 89,472 — (10,845) 78,627 3.66 Due after five years through ten years 34,988 — (5,645) 29,343 5.08 Mortgage-backed agency securities: Fixed rate pass-through 140,245 — (21,704) 118,541 4.84 Variable rate pass-through 414 — (4) 410 4.23 Fixed rate agency CMOs 518,560 — (82,714) 435,846 5.85 Variable rate agency CMOs 529 — (4) 525 5.09 Total mortgage-backed agency securities 659,748 — (104,426) 555,322 5.63 Total marketable securities held-to-maturity $ 784,208 — (120,916) 663,292 5.38 Northwest Bancshares, Inc. and Subsidiaries Borrowed Funds (Unaudited) (dollars in thousands) June 30, 2024 Amount Average rate Term notes payable to the FHLB of Pittsburgh , due within one year $ 175,000 5.65 % Collateralized borrowings, due within one year 26,213 1.83 % Collateral received, due within one year 41,150 5.17 % Subordinated debentures, net of issuance costs 114,364 4.28 % Junior subordinated debentures 129,703 7.61 % Total borrowed funds * $ 486,430 5.61 % * As of June 30, 2024 , the Company had $3.4 billion of additional borrowing capacity available with the FHLB of Pittsburgh , including a $250 million overnight line of credit, which has no balance as of June 30, 2024 , as well as $404 million of borrowing capacity available with the Federal Reserve Bank and $105 million with two correspondent banks. Northwest Bancshares, Inc. and Subsidiaries Analysis of Loan Portfolio by Loan Sector (Unaudited) Commercial real estate loans outstanding The following table provides the various loan sectors in our commercial real estate portfolio at June 30, 2024 : Property type Percent of portfolio 5 or more unit dwelling 16.8 % Nursing home 12.5 Retail building 11.7 Commercial office building - non-owner occupied 8.9 Manufacturing & industrial building 4.8 Residential acquisition & development - 1-4 family, townhouses and apartments 4.3 Multi-use building - commercial, retail and residential 4.0 Warehouse/storage building 3.9 Commercial office building - owner occupied 3.9 Multi-use building - office and warehouse 3.0 Other medical facility 3.0 Single family dwelling 2.6 Student housing 2.1 Hotel/motel 2.1 Agricultural real estate 2.0 All other 14.4 Total 100.0 % The following table describes the collateral of our commercial real estate portfolio by state at June 30, 2024 : State Percent of portfolio New York 32.7 % Pennsylvania 29.4 Ohio 20.7 Indiana 9.0 All other 8.2 Total 100.0 % Northwest Bancshares, Inc. and Subsidiaries Asset Quality (Unaudited) (dollars in thousands) June 30 , 2024 March 31 , 2024 December 31 , 2023 September 30 , 2023 June 30 , 2023 Nonaccrual loans current: Residential mortgage loans $ 1,563 1,351 959 1,951 1,559 Home equity loans 1,088 974 871 947 1,089 Consumer loans 1,268 1,295 1,051 1,049 1,009 Commercial real estate loans 66,181 66,895 64,603 44,639 48,468 Commercial loans 788 934 1,182 1,369 995 Total nonaccrual loans current $ 70,888 71,449 68,666 49,955 53,120 Nonaccrual loans delinquent 30 days to 59 days: Residential mortgage loans $ 100 1,454 933 48 49 Home equity loans 260 125 174 92 37 Consumer loans 305 294 225 274 309 Commercial real estate loans 699 574 51 1,913 1,697 Commercial loans 183 161 139 90 855 Total nonaccrual loans delinquent 30 days to 59 days $ 1,547 2,608 1,522 2,417 2,947 Nonaccrual loans delinquent 60 days to 89 days: Residential mortgage loans $ 578 — 511 66 185 Home equity loans 234 488 347 319 363 Consumer loans 603 381 557 312 360 Commercial real estate loans 2,243 52 831 212 210 Commercial loans 8,088 201 56 291 245 Total nonaccrual loans delinquent 60 days to 89 days $ 11,746 1,122 2,302 1,200 1,363 Nonaccrual loans delinquent 90 days or more: Residential mortgage loans $ 4,162 4,304 6,324 7,695 6,290 Home equity loans 2,473 2,822 3,100 2,073 1,965 Consumer loans 2,433 2,659 3,212 2,463 2,033 Commercial real estate loans 5,849 6,931 6,488 8,416 8,575 Commercial loans 3,061 3,165 2,770 2,435 2,296 Total nonaccrual loans delinquent 90 days or more $ 17,978 19,881 21,894 23,082 21,159 Total nonaccrual loans $ 102,159 95,060 94,384 76,654 78,589 Total nonaccrual loans $ 102,159 95,060 94,384 76,654 78,589 Loans 90 days past due and still accruing 2,511 2,452 2,698 728 532 Nonperforming loans 104,670 97,512 97,082 77,382 79,121 Real estate owned, net 74 50 104 363 371 Nonperforming assets $ 104,744 97,562 97,186 77,745 79,492 Nonperforming loans to total loans 0.92 % 0.85 % 0.85 % 0.68 % 0.70 % Nonperforming assets to total assets 0.73 % 0.67 % 0.67 % 0.54 % 0.56 % Allowance for credit losses to total loans 1.10 % 1.09 % 1.10 % 1.10 % 1.10 % Allowance for credit losses to nonperforming loans 119.49 % 128.08 % 129.01 % 161.33 % 157.26 % Northwest Bancshares, Inc. and Subsidiaries Loans by Credit Quality Indicators (Unaudited) (dollars in thousands) At June 30, 2024 Pass Special mention * Substandard ** Doubtful Loss Loans receivable Personal Banking: Residential mortgage loans $ 3,312,368 — 11,700 — — 3,324,068 Home equity loans 1,176,187 — 4,299 — — 1,180,486 Consumer loans 2,074,869 — 5,189 — — 2,080,058 Total Personal Banking 6,563,424 — 21,188 — — 6,584,612 Commercial Banking: Commercial real estate loans 2,682,766 130,879 213,993 — — 3,027,638 Commercial loans 1,673,052 47,400 21,662 — — 1,742,114 Total Commercial Banking 4,355,818 178,279 235,655 — — 4,769,752 Total loans $ 10,919,242 178,279 256,843 — — 11,354,364 At March 31, 2024 Personal Banking: Residential mortgage loans $ 3,370,307 — 12,541 — — 3,382,848 Home equity loans 1,191,957 — 4,650 — — 1,196,607 Consumer loans 2,113,050 — 5,317 — — 2,118,367 Total Personal Banking 6,675,314 — 22,508 — — 6,697,822 Commercial Banking: Commercial real estate loans 2,714,857 131,247 182,424 — — 3,028,528 Commercial loans 1,698,519 52,461 23,916 — — 1,774,896 Total Commercial Banking 4,413,376 183,708 206,340 — — 4,803,424 Total loans $ 11,088,690 183,708 228,848 — — 11,501,246 At December 31, 2023 Personal Banking: Residential mortgage loans $ 3,413,846 — 14,339 — — 3,428,185 Home equity loans 1,223,097 — 4,761 — — 1,227,858 Consumer loans 2,120,216 — 5,811 — — 2,126,027 Total Personal Banking 6,757,159 — 24,911 — — 6,782,070 Commercial Banking: Commercial real estate loans 2,670,510 124,116 179,384 — — 2,974,010 Commercial loans 1,637,879 6,678 14,172 — — 1,658,729 Total Commercial Banking 4,308,389 130,794 193,556 — — 4,632,739 Total loans $ 11,065,548 130,794 218,467 — — 11,414,809 At September 30, 2023 Personal Banking: Residential mortgage loans $ 3,459,251 — 13,512 — — 3,472,763 Home equity loans 1,254,985 — 3,780 — — 1,258,765 Consumer loans 2,150,464 — 4,655 — — 2,155,119 Total Personal Banking 6,864,700 — 21,947 — — 6,886,647 Commercial Banking: Commercial real estate loans 2,632,472 123,935 166,610 — — 2,923,017 Commercial loans 1,476,833 3,690 20,086 — — 1,500,609 Total Commercial Banking 4,109,305 127,625 186,696 — — 4,423,626 Total loans $ 10,974,005 127,625 208,643 — — 11,310,273 At June 30, 2023 Personal Banking: Residential mortgage loans $ 3,483,098 — 12,059 — — 3,495,157 Home equity loans 1,272,363 — 3,699 — — 1,276,062 Consumer loans 2,196,938 — 4,124 — — 2,201,062 Total Personal Banking 6,952,399 — 19,882 — — 6,972,281 Commercial Banking: Commercial real estate loans 2,649,535 74,170 171,519 — — 2,895,224 Commercial loans 1,377,981 3,040 22,705 — — 1,403,726 Total Commercial Banking 4,027,516 77,210 194,224 — — 4,298,950 Total loans $ 10,979,915 77,210 214,106 — — 11,271,231 * Includes $2.5 million , $2.4 million , $7.8 million , $6.9 million , and $4.9 million of acquired loans at June 30, 2024 , March 31, 2024 , December 31, 2023 , September 30, 2023 , and June 30, 2023 , respectively. ** Includes $24.3 million , $27.2 million , $20.3 million , $28.9 million , and $31.2 million of acquired loans at June 30, 2024 , March 31, 2024 , December 31, 2023 , September 30, 2023 , and June 30, 2023 , respectively. Northwest Bancshares, Inc. and Subsidiaries Loan Delinquency (Unaudited) (dollars in thousands) June 30 , 2024 * March 31 , 2024 * December 31 , 2023 * September 30 , 2023 * June 30 , 2023 * (Number of loans and dollar amount of loans) Loans delinquent 30 days to 59 days: Residential mortgage loans 12 $ 616 — % 351 $ 38,502 1.1 % 307 $ 30,041 0.9 % 6 $ 573 — % 14 $ 627 — % Home equity loans 104 3,771 0.3 % 113 4,608 0.4 % 121 5,761 0.5 % 112 4,707 0.4 % 92 3,395 0.3 % Consumer loans 742 10,372 0.5 % 737 9,911 0.5 % 896 11,211 0.5 % 733 9,874 0.5 % 602 7,955 0.4 % Commercial real estate loans 21 4,310 0.1 % 25 6,396 0.2 % 23 3,204 0.1 % 22 3,411 0.1 % 13 2,710 0.1 % Commercial loans 59 4,366 0.3 % 62 3,091 0.2 % 59 4,196 0.3 % 52 2,847 0.2 % 38 15,658 1.1 % Total loans delinquent 30 days to 59 days 938 $ 23,435 0.2 % 1,288 $ 62,508 0.5 % 1,406 $ 54,413 0.5 % 925 $ 21,412 0.2 % 759 $ 30,345 0.3 % Loans delinquent 60 days to 89 days: Residential mortgage loans 70 $ 8,223 0.2 % 3 $ 70 — % 69 $ 7,796 0.2 % 56 $ 5,395 0.2 % 52 $ 3,521 0.1 % Home equity loans 35 1,065 0.1 % 26 761 0.1 % 37 982 0.1 % 40 1,341 0.1 % 31 1,614 0.1 % Consumer loans 295 3,198 0.2 % 231 2,545 0.1 % 322 3,754 0.2 % 236 2,707 0.1 % 250 2,584 0.1 % Commercial real estate loans 9 3,155 0.1 % 5 807 — % 9 1,031 — % 13 1,588 0.1 % 12 1,288 — % Commercial loans 22 8,732 0.5 % 27 1,284 0.1 % 16 703 — % 15 981 0.1 % 23 11,092 0.8 % Total loans delinquent 60 days to 89 days 431 $ 24,373 0.2 % 292 $ 5,467 — % 453 $ 14,266 0.1 % 360 $ 12,012 0.1 % 368 $ 20,099 0.2 % Loans delinquent 90 days or more: ** Residential mortgage loans 53 $ 5,553 0.2 % 50 $ 5,813 0.2 % 70 $ 7,995 0.2 % 79 $ 7,695 0.2 % 63 $ 6,290 0.2 % Home equity loans 51 2,506 0.2 % 71 2,823 0.2 % 81 3,126 0.3 % 73 2,206 0.2 % 68 1,965 0.2 % Consumer loans 358 3,012 0.1 % 398 3,345 0.2 % 440 3,978 0.2 % 357 3,020 0.1 % 314 2,447 0.1 % Commercial real estate loans 19 6,034 0.2 % 22 6,931 0.2 % 27 6,712 0.2 % 27 8,416 0.3 % 20 8,575 0.3 % Commercial loans 72 3,385 0.2 % 62 3,421 0.2 % 53 2,780 0.2 % 39 2,472 0.2 % 38 2,414 0.2 % Total loans delinquent 90 days or more 553 $ 20,490 0.2 % 603 $ 22,333 0.2 % 671 $ 24,591 0.2 % 575 $ 23,809 0.2 % 503 $ 21,691 0.2 % Total loans delinquent 1,922 $ 68,298 0.6 % 2,183 $ 90,308 0.8 % 2,530 $ 93,270 0.8 % 1,860 $ 57,233 0.5 % 1,630 $ 72,135 0.6 % * Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding. ** Includes purchased credit deteriorated loans of $82,000 , $446,000 , $646,000 , $1.4 million , and $605,000 at June 30, 2024 , March 31, 2024 , December 31, 2023 , September 30, 2023 , and June 30, 2023 , respectively. Northwest Bancshares, Inc. and Subsidiaries Allowance for Credit Losses (Unaudited) (dollars in thousands) Quarter ended June 30 , 2024 March 31 , 2024 December 31 , 2023 September 30 , 2023 June 30 , 2023 Beginning balance $ 124,897 125,243 124,841 124,423 121,257 Provision 2,169 4,234 3,801 3,983 6,010 Charge-offs residential mortgage (252) (162) (266) (171) (545) Charge-offs home equity (237) (412) (133) (320) (235) Charge-offs consumer (2,561) (4,573) (3,860) (3,085) (2,772) Charge-offs commercial real estate (500) (349) (742) (484) (483) Charge-offs commercial (1,319) (1,163) (806) (1,286) (1,209) Recoveries 2,873 2,079 2,408 1,781 2,400 Ending balance $ 125,070 124,897 125,243 124,841 124,423 Net charge-offs to average loans, annualized 0.07 % 0.16 % 0.12 % 0.13 % 0.10 % Six months ended June 30 , 2024 2023 Beginning balance $ 125,243 118,036 ASU 2022-02 Adoption — 426 Provision 6,403 10,880 Charge-offs residential mortgage (414) (752) Charge-offs home equity (649) (399) Charge-offs consumer (7,134) (5,506) Charge-offs commercial real estate (849) (1,140) Charge-offs commercial (2,482) (2,074) Recoveries 4,952 4,952 Ending balance $ 125,070 124,423 Net charge-offs to average loans, annualized 0.12 % 0.09 % Northwest Bancshares, Inc. and Subsidiaries Average Balance Sheet (Unaudited) (dollars in thousands) The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages. Quarter ended June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Average balance Interest Avg. yield/ cost (h) Average balance Interest Avg. yield/ cost (h) Average balance Interest Avg. yield/ cost (h) Average balance Interest Avg. yield/ cost (h) Average balance Interest Avg. yield/ cost (h) Assets: Interest-earning assets: Residential mortgage loans $ 3,342,749 32,182 3.85 % $ 3,392,524 32,674 3.85 % $ 3,442,308 32,739 3.80 % $ 3,476,446 32,596 3.75 % $ 3,485,517 32,485 3.73 % Home equity loans 1,183,497 17,303 5.88 % 1,205,273 17,294 5.77 % 1,238,420 17,590 5.64 % 1,264,134 17,435 5.47 % 1,273,298 16,898 5.32 % Consumer loans 2,048,396 26,334 5.17 % 2,033,620 25,033 4.95 % 2,055,783 24,667 4.76 % 2,092,023 23,521 4.46 % 2,143,804 22,662 4.24 % Commercial real estate loans 3,023,762 45,658 5.97 % 2,999,224 43,425 5.73 % 2,950,589 43,337 5.75 % 2,911,145 41,611 5.59 % 2,836,443 38,426 5.36 % Commercial loans 1,770,345 33,229 7.43 % 1,714,667 31,857 7.35 % 1,564,617 28,801 7.20 % 1,447,211 26,239 7.09 % 1,326,598 22,872 6.82 % Total loans receivable (a) (b) (d) 11,368,749 154,706 5.47 % 11,345,308 150,283 5.33 % 11,251,717 147,134 5.19 % 11,190,959 141,402 5.01 % 11,065,660 133,343 4.83 % Mortgage-backed securities (c) 1,734,085 9,426 2.17 % 1,717,306 7,944 1.85 % 1,741,687 7,951 1.83 % 1,781,010 8,072 1.81 % 1,859,427 8,326 1.79 % Investment securities (c) (d) 287,262 1,316 1.83 % 333,752 1,430 1.71 % 335,121 1,425 1.70 % 336,125 1,431 1.70 % 374,560 1,715 1.83 % FHLB stock, at cost 25,544 498 7.84 % 32,249 607 7.57 % 35,082 665 7.52 % 37,722 668 7.03 % 45,505 844 7.44 % Other interest-earning deposits 135,520 1,791 5.23 % 61,666 832 5.34 % 71,987 970 5.27 % 67,143 915 5.33 % 46,536 594 5.05 % Total interest-earning assets 13,551,160 167,737 4.98 % 13,490,281 161,096 4.80 % 13,435,594 158,145 4.67 % 13,412,959 152,488 4.51 % 13,391,688 144,822 4.34 % Noninterest-earning assets (e) 907,432 918,331 893,426 966,364 854,229 Total assets $ 14,458,592 $ 14,408,612 $ 14,329,020 $ 14,379,323 $ 14,245,917 Liabilities and shareholders' equity: Interest-bearing liabilities: Savings deposits (g) $ 2,144,278 5,957 1.12 % $ 2,122,035 5,036 0.95 % $ 2,102,320 4,045 0.76 % $ 2,116,759 2,695 0.51 % $ 2,142,941 1,393 0.26 % Interest-bearing demand deposits (g) 2,555,863 6,646 1.05 % 2,538,823 5,402 0.86 % 2,573,634 4,921 0.76 % 2,569,229 4,086 0.63 % 2,469,666 1,648 0.27 % Money market deposit accounts (g) 1,957,990 8,601 1.77 % 1,961,332 7,913 1.62 % 1,997,116 7,446 1.48 % 2,112,228 6,772 1.27 % 2,221,713 6,113 1.10 % Time deposits (g) 2,832,720 31,550 4.48 % 2,697,983 29,335 4.37 % 2,447,335 24,187 3.92 % 2,164,559 18,136 3.32 % 1,765,454 12,663 2.88 % Borrowed funds (f) 323,191 3,662 4.56 % 469,697 5,708 4.89 % 548,089 6,826 4.94 % 643,518 7,937 4.89 % 837,358 10,202 4.89 % Subordinated debt 114,308 1,148 4.02 % 114,225 1,148 4.02 % 114,134 1,148 4.02 % 114,045 1,148 4.03 % 113,958 1,148 4.03 % Junior subordinated debentures 129,663 2,449 7.47 % 129,597 2,459 7.51 % 129,532 2,512 7.59 % 129,466 2,456 7.42 % 129,401 2,280 6.97 % Total interest-bearing liabilities 10,058,013 60,013 2.40 % 10,033,692 57,001 2.28 % 9,912,160 51,085 2.04 % 9,849,804 43,230 1.74 % 9,680,491 35,447 1.47 % Noninterest-bearing demand deposits (g) 2,595,511 2,567,781 2,675,788 2,757,091 2,820,928 Noninterest-bearing liabilities 263,634 257,269 234,177 257,141 224,508 Total liabilities 12,917,158 12,858,742 12,822,125 12,864,036 12,725,927 Shareholders' equity 1,541,434 1,549,870 1,506,895 1,515,287 1,519,990 Total liabilities and shareholders' equity $ 14,458,592 $ 14,408,612 $ 14,329,020 $ 14,379,323 $ 14,245,917 Net interest income/Interest rate spread 107,724 2.58 % 104,095 2.52 % 107,060 2.63 % 109,258 2.77 % 109,375 2.87 % Net interest-earning assets/Net interest margin $ 3,493,147 3.20 % $ 3,456,589 3.10 % $ 3,523,434 3.16 % $ 3,563,155 3.23 % $ 3,711,197 3.28 % Ratio of interest-earning assets to interest-bearing liabilities 1.35X 1.34X 1.36X 1.36X 1.38X (a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status. (b) Interest income includes accretion/amortization of deferred loan fees/expenses, which was not material. (c) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale. (d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent ("FTE") basis. (e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale. (f) Average balances include FHLB borrowings and collateralized borrowings. (g) Average cost of deposits were 1.76%, 1.61%, 1.37%, 1.07%, and 0.77%, respectively, and average cost of Interest-bearing deposits were 2.24%, 2.06%, 1.77%, 1.40%, and 1.02%, respectively. (h) Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans — 5.45%, 5.30%, 5.17%, 4.99%, and 4.81%, respectively, Investment securities — 1.65%, 1.54%, 1.52%, 1.52%, and 1.61%, respectively, Interest-earning assets — 4.95%, 4.78%, 4.65%, 4.48%, and 4.31%, respectively. GAAP basis net interest rate spreads were 2.55%, 2.49%, 2.60%, 2.74%, and 2.84%, respectively, and GAAP basis net interest margins were 3.17%, 3.08%, 3.14%, 3.21%, and 3.25%, respectively. Northwest Bancshares, Inc. and Subsidiaries Average Balance Sheet (Unaudited) (in thousands) The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages. Six months ended June 30 , 2024 2023 Average balance Interest Avg. yield/ cost (h) Average balance Interest Avg. yield/ cost (h) Assets Interest-earning assets: Residential mortgage loans $ 3,367,636 64,855 3.85 % $ 3,489,545 64,494 3.70 % Home equity loans 1,194,385 34,596 5.83 % 1,278,831 33,033 5.21 % Consumer loans 2,041,008 51,367 5.06 % 2,133,794 43,457 4.11 % Commercial real estate loans 3,011,493 89,066 5.85 % 2,830,316 75,463 5.30 % Commercial loans 1,742,506 65,083 7.39 % 1,244,404 41,225 6.59 % Loans receivable (a) (b) (d) 11,357,028 304,967 5.40 % 10,976,890 257,672 4.73 % Mortgage-backed securities (c) 1,725,696 17,370 2.01 % 1,884,412 16,863 1.79 % Investment securities (c) (d) 310,507 2,742 1.77 % 379,611 3,478 1.83 % FHLB stock, at cost 28,897 1,105 7.69 % 42,584 1,534 7.26 % Other interest-earning deposits 99,252 2,623 5.23 % 42,431 1,017 4.77 % Total interest-earning assets 13,521,380 328,807 4.89 % 13,325,928 280,564 4.25 % Noninterest-earning assets (e) 912,222 858,122 Total assets $ 14,433,602 $ 14,184,050 Liabilities and shareholders' equity Interest-bearing liabilities: Savings deposits (g) $ 2,133,157 10,993 1.04 % $ 2,187,355 2,082 0.19 % Interest-bearing demand deposits (g) 2,547,343 12,048 0.95 % 2,540,879 2,599 0.21 % Money market deposit accounts (g) 1,959,661 16,514 1.69 % 2,314,631 10,516 0.92 % Time deposits (g) 2,765,351 60,885 4.43 % 1,514,289 17,858 2.38 % Borrowed funds (f) 396,444 9,370 4.75 % 789,057 18,139 4.64 % Subordinated debt 114,267 2,296 4.02 % 113,914 2,296 4.03 % Junior subordinated debentures 129,630 4,908 7.49 % 129,368 4,433 6.82 % Total interest-bearing liabilities 10,045,853 117,014 2.34 % 9,589,493 57,923 1.22 % Noninterest-bearing demand deposits (g) 2,581,646 2,855,260 Noninterest-bearing liabilities 260,452 229,831 Total liabilities 12,887,951 12,674,584 Shareholders' equity 1,545,651 1,509,466 Total liabilities and shareholders' equity $ 14,433,602 $ 14,184,050 Net interest income/Interest rate spread 211,793 2.55 % 222,641 3.03 % Net interest-earning assets/Net interest margin $ 3,475,527 3.15 % $ 3,736,435 3.37 % Ratio of interest-earning assets to interest-bearing liabilities 1.35X 1.39X (a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status. (b) Interest income includes accretion/amortization of deferred loan fees/expenses, which were not material. (c) Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale. (d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent ("FTE") basis. (e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale. (f) Average balances include FHLB borrowings and collateralized borrowings. (g) Average cost of deposits were 1.69% and 0.58%, respectively and average cost of Interest-bearing deposits were 2.15% and 0.78%, respectively. (h) Shown on a FTE basis. GAAP basis yields were: Loans — 5.37% and 4.71%, respectively; Investment securities — 1.59% and 1.61%, respectively; Interest-earning assets — 4.86% and 4.22%, respectively. GAAP basis net interest rate spreads were 2.52% and 3.00%, respectively; and GAAP basis net interest margins were 3.12% and 3.34%, respectively. View original content to download multimedia: https://www.prnewswire.com/news-releases/northwest-bancshares-inc-announces-second-quarter-2024-net-income-of-5-million-or-0-04-per-diluted-share-302203261.html SOURCE Northwest Bancshares, Inc.

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