Northwest Bancshares, Inc. Announces Third Quarter 2024 net income of $34 million, or $0.26 per diluted share

About this update from Northwest Bancshares, Inc.

Net interest margin expands 13 basis points to 3.33%, inclusive of 4bps from an interest recovery Average deposits grew $10 million while cost of funds remain ed stable Noninterest expense declines $2 million due to disciplined expense management 120th consecutive quarterly dividend of $0.20 per share declared COLUMBUS, Ohio , Oct. 29, 2024 /PRNewswire/ -- Northwest Bancshares, Inc. , (the "Company"), (NasdaqGS: NWBI) announced net income for the quarter ended September 30, 2024 of $34 million , or $0.26 per diluted share. This represents a decrease of $5 million compared to the same quarter last year, when net income was $39 million , or $0.31 per diluted share, and an increase of $29 million compared to the prior quarter, when net income was $5 million , or $0.04 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended September 30, 2024 were 8.50% and 0.93% compared to 10.27% and 1.08% for the same quarter last year and 1.24% and 0.13% from the prior quarter. Compared to adjusted net operating income (non-GAAP) of $35 million , or $0.27 , per diluted share in the prior quarter, adjusted net operating income (non-GAAP) decreased by $1 million to $34 million , or $0.26 , per diluted share for the quarter ended September 30, 2024 . This decrease was driven by an increase in provision expense which was $5 million for the quarter ended September 30, 2024 compared to $(0.4) million for the quarter ended June 30, 2024 . The adjusted annualized returns on average shareholders' equity (non-GAAP) and average assets (non-GAAP) for the quarter ended September 30, 2024 were 8.51% and 0.93% compared to 9.00% and 0.96% for prior quarter. The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share payable on November 18, 2024 to shareholders of record as of November 8, 2024 . This is the 120th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of September 30, 2024 , this represents an annualized dividend yield of approximately 6.0%. Louis J. Torchio , President and CEO, added, "Our performance this quarter demonstrates the strength and resilience of our business model. We've delivered solid results that underscore our expanding earnings power, driven in large part by improvements in our net interest margin. This positive trajectory reflects our team's dedication to operational excellence and strategic growth initiatives." "As we look ahead, we remain committed to creating long-term value for our shareholders. I'm pleased to announce that for the 120th consecutive quarter, we will be returning our earnings to our shareholders through a $0.20 per share dividend. This consistency in shareholder returns is a testament to our financial stability, performance and our unwavering focus on delivering sustainable growth. We enter the next quarter with confidence, buoyed by our strong performance and the ongoing optimization of our business operations. Our team remains focused on capitalizing on market opportunities while maintaining prudent risk management practices. Northwest is well-positioned to continue driving value for our shareholders, clients and communities in the quarters to come." Balance Sheet Highlights Dollars in thousands Change 3Q24 vs. 3Q24 2Q24 3Q23 2Q24 3Q23 Average loans receivable $ 11,223,602 11,368,749 11,190,959 (1.3) % 0.3 % Average investments 1,998,855 2,021,347 2,117,135 (1.1) % (5.6) % Average deposits 12,096,811 12,086,362 11,719,866 0.1 % 3.2 % Average borrowed funds 220,677 323,191 643,518 (31.7) % (65.7) % Average loans receivable increased $33 million from the quarter ended September 30, 2023 driven by our commercial banking portfolio, which grew by $456 million in total, including a $372 million increase in our commercial and industrial portfolio as we have continued to build-out our commercial lending verticals. This was offset by a decline in our personal banking portfolio, which decreased by $423 million as cash flows from this portfolio were reinvested in our commercial portfolios. Compared to the second quarter of 2024, average loans receivable decreased by $145 million. Growth was muted in the quarter as we continue to reinvest cash flows from our personal banking portfolio and focus on profitability and credit discipline. Average investments declined $118 million from the quarter ended September 30, 2023 and $22 million from the quarter ended June 30, 2024 . The decline from the prior year was driven by the investment portfolio restructure which occurred in the second quarter and from lack of reinvestment of cash flow over the past year. The decline in average investments from the prior quarter is expected to be temporary as current quarter purchases occurred later in the quarter. This is evident as ending balances increased $28 million from the prior quarter end. Average deposits grew $377 million from the quarter ended September 30, 2023 , driven by a $666 million increase in our average time deposits as we competitively positioned our deposit products over the last year. 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 second quarter of 2024, average deposits grew $10 million, driven by a $12 million increase in our average interest-bearing checking deposits. This increase was partially offset by a decrease in time deposits. Average borrowings saw a significant reduction of $423 million compared to the quarter end September 30, 2023 and $103 million compared to the quarter ended June 30, 2024 . The decrease in average borrowings is primarily attributable to the strategic pay-down of wholesale borrowings. This decrease was made possible by the restructuring of our investment 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 3Q24 vs. 3Q24 2Q24 3Q23 2Q24 3Q23 Interest income $ 171,381 166,854 151,598 2.7 % 13.0 % Interest expense 60,079 60,013 43,230 0.1 % 39.0 % Net interest income $ 111,302 106,841 108,368 4.2 % 2.7 % Net interest margin 3.33 % 3.20 % 3.23 % Compared to the quarter ended September 30, 2023 , net interest income increased $3 million and net interest margin increased to 3.33% from 3.23% for the quarter ended September 30, 2023 . This increase in net interest income resulted primarily from: A $20 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 5.57% for the quarter ended September 30, 2024 from 5.01% for the quarter ended September 30, 2023 . This increase includes a one-time interest recovery of $1.3 million on a commercial loan payoff. Excluding this interest recovery, the adjusted yield on loans for the quarter ended September 30, 2024 was 5.53% and the adjusted net interest margin was 3.29% A $17 million increase in interest expense 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 2.39% for the quarter ended September 30, 2024 from 1.74% for the quarter ended September 30, 2023 . Compared to the quarter ended June 30, 2024 , net interest income increased $4 million and net interest margin increased to 3.33% for the quarter ended September 30, 2024 from 3.20% for the quarter ended June 30, 2024 . This increase in net interest income resulted from the following: A $5 million increase in interest income driven by higher interest income on loans receivable and investments as average yield increased compared to the prior quarter. The average yield on loans improved to 5.57% from 5.47% and average investment yields increased to 2.48% from 2.13% for the quarter ended June 30, 2024 . Dollars in thousands Change 3Q24 vs. 3Q24 2Q24 3Q23 2Q24 3Q23 Provision for credit losses - loans $ 5,727 2,169 3,983 164.0 % 43.8 % Provision for credit losses - unfunded commitments (852) (2,539) (2,981) (66.4) % (71.4) % Total provision for credit losses expense $ 4,875 (370) 1,002 (1417.6) % 386.5 % The total provision for credit losses for the quarter ended September 30, 2024 was $4.9 million primarily driven by growth within our commercial lending portfolio and changes 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 saw an increase in classified loans to $320 million , or 2.83% of total loans, at September 30, 2024 from $209 million , or 1.84% of total loans, at September 30, 2023 and $257 million , or 2.26% of total loans, at June 30, 2024 . The primary driver of the increase over the past year and quarter is reflective of the Company's exposure to the Long Term Healthcare segment and the challenges a few operators have experienced post Covid. Dollars in thousands Change 3Q24 vs. 3Q24 2Q24 3Q23 2Q24 3Q23 Noninterest income: Loss on sale of investments $ — (39,413) — NA NA Gain on sale of SBA loans 667 1,457 301 (54.2) % 121.6 % Service charges and fees 15,932 15,527 15,270 2.6 % 4.3 % Trust and other financial services income 7,924 7,566 7,085 4.7 % 11.8 % Gain on real estate owned, net 105 487 29 (78.4) % 262.1 % Income from bank-owned life insurance 1,434 1,371 4,561 4.6 % (68.6) % Mortgage banking income 744 901 632 (17.4) % 17.7 % Other operating income 1,027 3,255 3,010 (68.4) % (65.9) % Total noninterest income/(loss) $ 27,833 (8,849) 30,888 (414.5) % (9.9) % Noninterest income decreased from the quarter ended September 30, 2023 due to a decrease in income from bank-owned life insurance of $3 million as a result of death benefits received in the prior period. Compared to the quarter ended June 30, 2024 , excluding the loss on sale of securities of $39 million, noninterest income decreased by $3 million due to a loss on an equity method investment, lower gain on sale of SBA loans and loss on the sale of buildings during the quarter. Dollars in thousands Change 3Q24 vs. 3Q24 2Q24 3Q23 2Q24 3Q23 Noninterest expense: Personnel expense $ 56,186 53,531 51,243 5.0 % 9.6 % Non-personnel expense 34,581 38,889 36,327 (11.1) % (4.8) % Total noninterest expense $ 90,767 92,420 87,570 (1.8) % 3.7 % Noninterest expense increased from the quarter ended September 30, 2023 due to a $5 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 coupled with an increase in contracted employees utilized during the quarter and an increase in medical expenses. Compared to the quarter ended June 30, 2024 , noninterest expense decreased due to a $3 million increase in personnel expense driven by additional contracted employees utilized during the quarter and an increase in medical expenses, which were more than offset by a decrease in non-personnel expense of $4 million due to restructuring expenses in the prior quarter and a decrease in fraud losses. Dollars in thousands Change 3Q24 vs. 3Q24 2Q24 3Q23 2Q24 3Q23 Income before income taxes $ 43,493 5,942 50,684 632.0 % (14.2) % Income tax expense 9,875 1,195 11,464 726.4 % (13.9) % Net income $ 33,618 4,747 39,220 608.2 % (14.3) % The provision for income taxes decreased by $2 million from the quarter ended September 30, 2023 and increased $9 million from the quarter ended June 30, 2024 primarily due to the quarterly change in income before income taxes. Net income decreased from the quarter ended September 30, 2023 , due to the factors discussed above, and increased from the quarter ended June 30, 2024 due to loss on sale of investments from the prior 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 September 30, 2024 , Northwest operated 130 full-service financial centers and eleven free standing drive-up facilities in Pennsylvania , New York, Ohio and Indiana. Northwest Bancshares, Inc.'s common stock is listed on The Nasdaq Stock Market LLC ("NWBI"). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed online 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, 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, except as required by law. Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Financial Condition (Unaudited) (dollars in thousands, except per share amounts) September 30 , 2024 December 31 , 2023 September 30 , 2023 Assets Cash and cash equivalents $ 226,883 122,260 161,995 Marketable securities available-for-sale (amortized cost of $1,248,104 , $1,240,003 and $1,262,080 ,respectively) 1,111,868 1,043,359 1,010,076 Marketable securities held-to-maturity (fair value of $672,641 , $699,506 and $682,681 , respectively) 766,772 814,839 830,106 Total cash and cash equivalents and marketable securities 2,105,523 1,980,458 2,002,177 Loans held-for-sale 9,370 8,768 10,592 Residential mortgage loans 3,248,788 3,419,417 3,462,606 Home equity loans 1,167,202 1,227,858 1,258,765 Consumer loans 1,998,032 2,126,027 2,155,119 Commercial real estate loans 2,994,379 2,974,010 2,922,582 Commercial loans 1,886,787 1,658,729 1,500,609 Total loans receivable 11,304,558 11,414,809 11,310,273 Allowance for credit losses (125,813) (125,243) (124,841) Loans receivable, net 11,178,745 11,289,566 11,185,432 FHLB stock, at cost 21,223 30,146 40,404 Accrued interest receivable 46,678 47,353 42,624 Real estate owned, net 76 104 363 Premises and equipment, net 126,391 138,838 138,041 Bank-owned life insurance 255,324 251,895 250,502 Goodwill 380,997 380,997 380,997 Other intangible assets, net 3,363 5,290 6,013 Other assets 236,005 294,458 315,648 Total assets $ 14,354,325 14,419,105 14,362,201 Liabilities and shareholders' equity Liabilities Noninterest-bearing demand deposits $ 2,581,769 2,669,023 2,774,291 Interest-bearing demand deposits 2,676,779 2,634,546 2,598,080 Money market deposit accounts 1,956,747 1,968,218 2,042,813 Savings deposits 2,145,735 2,105,234 2,116,360 Time deposits 2,710,049 2,602,881 2,258,338 Total deposits 12,071,079 11,979,902 11,789,882 Borrowed funds 204,374 398,895 604,587 Subordinated debt 114,451 114,189 114,102 Junior subordinated debentures 129,769 129,574 129,509 Advances by borrowers for taxes and insurance 24,700 45,253 27,653 Accrued interest payable 15,125 13,669 7,915 Other liabilities 203,502 186,306 190,122 Total liabilities 12,763,000 12,867,788 12,863,770 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, 127,400,199, 127,110,453 and 127,101,349 shares issued and outstanding, respectively 1,274 1,271 1,271 Additional paid-in capital 1,030,384 1,024,852 1,023,591 Retained earnings 665,845 674,686 671,092 Accumulated other comprehensive loss (106,178) (149,492) (197,523) Total shareholders' equity 1,591,325 1,551,317 1,498,431 Total liabilities and shareholders' equity $ 14,354,325 14,419,105 14,362,201 Equity to assets 11.09 % 10.76 % 10.43 % Tangible common equity to tangible assets* 8.64 % 8.30 % 7.95 % Book value per share $ 12.49 12.20 11.79 Tangible book value per share* $ 9.47 9.17 8.74 Closing market price per share $ 13.38 12.48 10.23 Full time equivalent employees 1,975 2,098 2,084 Number of banking offices 141 142 142 * 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 September 30 , 2024 June 30 , 2024 March 31 ,2024 December 31 ,2023 September 30 ,2023 Interest income: Loans receivable $ 156,413 153,954 149,571 146,523 140,667 Mortgage-backed securities 10,908 9,426 7,944 7,951 8,072 Taxable investment securities 842 728 794 786 786 Tax-free investment securities 512 457 491 492 491 FHLB stock dividends 394 498 607 666 668 Interest-earning deposits 2,312 1,791 832 970 914 Total interest income 171,381 166,854 160,239 157,388 151,598 Interest expense: Deposits 54,198 52,754 47,686 40,600 31,688 Borrowed funds 5,881 7,259 9,315 10,486 11,542 Total interest expense 60,079 60,013 57,001 51,086 43,230 Net interest income 111,302 106,841 103,238 106,302 108,368 Provision for credit losses - loans 5,727 2,169 4,234 3,801 3,983 Provision for credit losses - unfunded commitments (852) (2,539) (799) 4,145 (2,981) Net interest income after provision for credit losses 106,427 107,211 99,803 98,356 107,366 Noninterest income: Loss on sale of investments — (39,413) — (1) — Gain on sale of SBA loans 667 1,457 873 388 301 Gain on sale of loans — — — 726 — Service charges and fees 15,932 15,527 15,523 15,922 15,270 Trust and other financial services income 7,924 7,566 7,127 6,884 7,085 Gain on real estate owned, net 105 487 57 1,084 29 Income from bank-owned life insurance 1,434 1,371 1,502 1,454 4,561 Mortgage banking income 744 901 452 247 632 Other operating income 1,027 3,255 2,429 2,465 3,010 Total noninterest income/(loss) 27,833 (8,849) 27,963 29,169 30,888 Noninterest expense: Compensation and employee benefits 56,186 53,531 51,540 50,194 51,243 Premises and occupancy costs 7,115 7,464 7,627 7,049 7,052 Office operations 2,811 3,819 2,767 3,747 3,398 Collections expense 474 406 336 328 551 Processing expenses 14,570 14,695 14,725 15,017 14,672 Marketing expenses 2,004 2,410 2,149 1,317 2,379 Federal deposit insurance premiums 2,763 2,865 3,023 2,643 2,341 Professional services 3,302 3,728 4,065 6,255 3,002 Amortization of intangible assets 590 635 701 724 795 Real estate owned expense 23 57 66 51 141 Merger, asset disposition and restructuring expense 43 1,915 955 2,354 — Other expenses 886 895 2,070 997 1,996 Total noninterest expense 90,767 92,420 90,024 90,676 87,570 Income before income taxes 43,493 5,942 37,742 36,849 50,684 Income tax expense 9,875 1,195 8,579 7,835 11,464 Net income $ 33,618 4,747 29,163 29,014 39,220 Basic earnings per share $ 0.26 0.04 0.23 0.23 0.31 Diluted earnings per share $ 0.26 0.04 0.23 0.23 0.31 Annualized return on average equity 8.50 % 1.24 % 7.57 % 7.64 % 10.27 % Annualized return on average assets 0.93 % 0.13 % 0.81 % 0.80 % 1.08 % Annualized return on average tangible common equity * 11.26 % 1.65 % 10.08 % 10.28 % 13.80 % Efficiency ratio 65.24 % 94.31 % 68.62 % 66.93 % 62.88 % Efficiency ratio, excluding certain items ** 64.78 % 65.41 % 67.35 % 64.66 % 62.31 % Annualized noninterest expense to average assets 2.52 % 2.57 % 2.51 % 2.51 % 2.42 % Annualized noninterest expense to average assets, excluding certainitems** 2.50 % 2.50 % 2.47 % 2.43 % 2.39 % * 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, 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) Nine months ended September 30 , 2024 2023 Interest income: Loans receivable $ 459,938 397,136 Mortgage-backed securities 28,278 24,935 Taxable investment securities 2,364 2,472 Tax-free investment securities 1,460 1,858 FHLB stock dividends 1,499 2,202 Interest-earning deposits 4,935 1,931 Total interest income 498,474 430,534 Interest expense: Deposits 154,638 64,743 Borrowed funds 22,455 36,410 Total interest expense 177,093 101,153 Net interest income 321,381 329,381 Provision for credit losses - loans 12,130 14,863 Provision for credit losses - unfunded commitments (4,190) 65 Net interest income after provision for credit losses 313,441 314,453 Noninterest income: Loss on sale of investments (39,413) (8,306) Gain on sale of mortgage servicing rights — 8,305 Gain on sale of SBA loans 2,997 1,412 Service charges and fees 46,982 43,292 Trust and other financial services income 22,617 20,400 Gain on real estate owned, net 649 922 Income from bank-owned life insurance 4,307 7,134 Mortgage banking income 2,097 2,184 Other operating income 6,711 9,311 Total noninterest income 46,947 84,654 Noninterest expense: Compensation and employee benefits 161,257 145,497 Premises and occupancy costs 22,206 22,102 Office operations 9,397 9,208 Collections expense 1,216 1,367 Processing expenses 43,990 43,670 Marketing expenses 6,563 8,127 Federal deposit insurance premiums 8,651 6,628 Professional services 11,095 11,564 Amortization of intangible assets 1,926 2,546 Real estate owned expense 146 405 Merger, asset disposition and restructuring expense 2,913 4,395 Other expenses 3,851 5,369 Total noninterest expense 273,211 260,878 Income before income taxes 87,177 138,229 Income tax expense 19,649 32,286 Net income $ 67,528 105,943 Basic earnings per share $ 0.53 0.83 Diluted earnings per share $ 0.53 0.83 Annualized return on average equity 5.80 % 9.37 % Annualized return on average assets 0.63 % 0.99 % Annualized return on tangible common equity * 7.71 % 12.61 % Efficiency ratio 74.18 % 63.01 % Efficiency ratio, excluding certain items ** 65.82 % 61.33 % Annualized noninterest expense to average assets 2.53 % 2.45 % Annualized noninterest expense to average assets, excluding certain items ** 2.49 % 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 Nine months ended September 30 , September 30 ,2024 June 30 , 2024 September 30 ,2023 2024 2023 Reconciliation of net income to adjusted net operating income: Net income (GAAP) $ 33,618 4,747 39,220 67,528 105,943 Non-GAAP adjustments Add: merger, asset disposition and restructuring expense 43 1,915 — 2,913 4,395 Add: loss on the sale of investments — 39,413 — 39,413 8,306 Less: gain on sale of mortgage servicing rights — — — — (8,305) Less: tax benefit of non-GAAP adjustments (12) (11,572) — (11,851) (1,231) Adjusted net operating income (non-GAAP) $ 33,649 34,503 39,220 98,003 109,108 Diluted earnings per share (GAAP) $ 0.26 0.04 0.31 0.53 0.83 Diluted adjusted operating earnings per share (non-GAAP) $ 0.26 0.27 0.31 0.77 0.86 Average equity $ 1,572,897 1,541,434 1,515,287 1,554,800 1,511,428 Average assets 14,351,669 14,458,592 14,379,323 14,406,092 14,249,857 Annualized return on average equity (GAAP) 8.50 % 1.24 % 10.27 % 5.80 % 9.37 % Annualized return on average assets (GAAP) 0.93 % 0.13 % 1.08 % 0.63 % 0.99 % Annualized return on average equity, excluding merger, asset disposition and restructuring expense, loss on the sale of investmentsand gain on sale of mortgage servicing rights, net of tax (non-GAAP) 8.51 % 9.00 % 10.27 % 8.42 % 9.65 % Annualized return on average assets, excluding merger, assetdisposition and restructuring expense, loss on sale of investments, andgain on sale of mortgage servicing rights, net of tax (non-GAAP) 0.93 % 0.96 % 1.08 % 0.91 % 1.02 % 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. September 30 , 2024 December 31 , 2023 September 30 , 2023 Tangible common equity to assets Total shareholders' equity $ 1,591,325 1,551,317 1,498,431 Less: goodwill and intangible assets (384,360) (386,287) (387,010) Tangible common equity $ 1,206,965 1,165,030 1,111,421 Total assets $ 14,354,325 14,419,105 14,362,201 Less: goodwill and intangible assets (384,360) (386,287) (387,010) Tangible assets $ 13,969,965 14,032,818 13,975,191 Tangible common equity to tangible assets 8.64 % 8.30 % 7.95 % Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments Tangible common equity $ 1,206,965 1,165,030 1,111,421 Less: unrealized losses on held to maturity investments (94,131) (115,334) (147,425) Add: deferred taxes on unrealized losses on held to maturity investments 26,357 32,294 41,279 Tangible common equity, including unrealized losses on held-to-maturity investments $ 1,139,191 1,081,990 1,005,275 Tangible assets $ 13,969,965 14,032,818 13,975,191 Tangible common equity to tangible assets, including unrealized losses on held-to-maturity investments 8.15 % 7.71 % 7.19 % Tangible book value per share Tangible common equity $ 1,206,965 1,165,030 1,111,421 Common shares outstanding 127,400,199 127,110,453 127,101,349 Tangible book value per share 9.47 9.17 8.74 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 Nine months ended September 30 , September 30 , 2024 June 30 , 2024 March 31 , 2024 December 31 , 2023 September 30 , 2023 2024 2023 Annualized return on average tangible common equity Net income $ 33,618 4,747 29,163 29,014 39,220 67,528 105,943 Average shareholders' equity 1,572,897 1,541,434 1,549,870 1,506,895 1,515,287 1,554,800 1,511,428 Less: average goodwill and intangible assets (384,730) (385,364) (386,038) (386,761) (387,523) (385,375) (388,365) Average tangible common equity $ 1,188,167 1,156,070 1,163,832 1,120,134 1,127,764 1,169,425 1,123,063 Annualized return on average tangible common equity 11.26 % 1.65 % 10.08 % 10.28 % 13.80 % 7.71 % 12.61 % Efficiency ratio, excluding loss on the sale of investments, gain on the sale ofmortgage servicing rights, amortization and merger, asset disposition andrestructuring expenses Non-interest expense $ 90,767 92,420 90,024 90,676 87,570 273,211 260,878 Less: amortization expense (590) (635) (701) (724) (795) (1,926) (2,546) Less: merger, asset disposition and restructuring expenses (43) (1,915) (955) (2,354) — (2,913) (4,395) Non-interest expense, excluding amortization and merger, assets disposition andrestructuring expenses $ 90,134 89,870 88,368 87,598 86,775 268,372 253,937 Net interest income $ 111,302 106,841 103,238 106,302 108,368 321,381 329,381 Non-interest income 27,833 (8,849) 27,963 29,169 30,888 46,947 84,654 Add: loss on the sale of investments — 39,413 — 1 — 39,413 8,306 Less: gain on sale of mortgage servicing rights — — — — — — (8,305) Net interest income plus non-interest income, excluding loss on sale of investmentsand gain on sale of mortgage servicing rights $ 139,135 137,405 131,201 135,472 139,256 407,741 414,036 Efficiency ratio, excluding loss on sale of investments, gain on sale of mortgageservicing rights, amortization and merger, asset disposition and restructuring expenses 64.78 % 65.41 % 67.35 % 64.66 % 62.31 % 65.82 % 61.33 % Annualized non-interest expense to average assets, excluding amortization andmerger, asset disposition and restructuring expense Non-interest expense excluding amortization and merger, asset disposition andrestructuring expenses $ 90,134 89,870 88,368 87,598 86,775 268,372 253,937 Average assets 14,351,669 14,458,592 14,408,612 14,329,020 14,379,323 14,406,092 14,249,857 Annualized non-interest expense to average assets, excluding amortization and merger,asset disposition and restructuring expense 2.50 % 2.50 % 2.47 % 2.43 % 2.39 % 2.49 % 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 September 30, 2024 Balance Percent of total deposits Number of relationships Uninsured deposits per the Call Report (1) $ 3,097,247 25.7 % 5,234 Less intercompany deposit accounts 1,201,625 10.0 % 12 Less collateralized deposit accounts 480,039 4.0 % 262 Uninsured deposits excluding intercompany and collateralized accounts $ 1,415,583 11.7 % 4,960 (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 $19.6 million , or 0.16% of total deposits, as of September 30, 2024 . Our top ten largest uninsured depositors, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $103 million , or 0.85% of total deposits, as of September 30, 2024 . The average uninsured deposit account balance, excluding intercompany and collateralized accounts, was $285,000 as of September 30, 2024 . The following table provides additional details for the Company's deposit portfolio: As of September 30, 2024 Balance Percent of total deposits Number of accounts Personal noninterest bearing demand deposits $ 1,316,845 10.9 % 286,061 Business noninterest bearing demand deposits 1,264,924 10.5 % 43,284 Personal interest-bearing demand deposits 1,340,668 11.1 % 56,490 Business interest-bearing demand deposits 1,336,111 11.0 % 7,688 Personal money market deposits 1,394,904 11.6 % 24,735 Business money market deposits 561,843 4.6 % 2,738 Savings deposits 2,145,735 17.8 % 183,941 Time deposits 2,710,049 22.5 % 81,728 Total deposits $ 12,071,079 100.0 % 686,665 Our average deposit account balance as of September 30, 2024 was $18,000 . The Company's insured cash sweep deposit balance was $487 million as of September 30, 2024 . The following table provides additional details regarding the Company's deposit portfolio over time: 3/31/2023 6/30/2023 9/30/2023 12/31/2023 3/31/2024 6/30/2024 9/30/2024 Personal noninterest bearing demand deposits $ 1,428,232 1,397,167 1,375,144 1,357,875 1,369,294 1,350,520 1,316,845 Business noninterest bearing demand deposits 1,467,860 1,423,396 1,399,147 1,311,148 1,249,085 1,231,179 1,264,924 Personal interest-bearing demand deposits 1,627,546 1,535,254 1,477,617 1,464,058 1,427,140 1,396,825 1,340,668 Business interest-bearing demand deposits 466,105 624,252 689,914 812,433 805,069 815,358 955,120 Municipal demand deposits 447,852 418,147 430,549 358,055 325,657 353,567 380,991 Personal money market deposits 1,626,614 1,511,652 1,463,689 1,435,939 1,393,532 1,390,162 1,394,904 Business money market deposits 701,436 642,601 579,124 532,279 559,005 574,679 561,843 Savings deposits 2,194,743 2,120,215 2,116,360 2,105,234 2,156,048 2,148,727 2,145,735 Time deposits 1,576,791 1,989,711 2,258,338 2,602,881 2,786,814 2,826,362 2,710,049 Total deposits $ 11,537,179 11,662,395 11,789,882 11,979,902 12,071,644 12,087,379 12,071,079 Northwest Bancshares, Inc. and Subsidiaries Regulatory Capital Requirements (Unaudited) (dollars in thousands) At September 30, 2024 Actual (1) Minimum capital requirements (2) Well capitalized requirements Amount Ratio Amount Ratio Amount Ratio Total capital (to risk weighted assets) Northwest Bancshares, Inc. $ 1,705,283 16.024 % $ 1,117,392 10.500 % $ 1,064,183 10.000 % Northwest Bank 1,460,909 13.740 % 1,116,384 10.500 % 1,063,223 10.000 % Tier 1 capital (to risk weighted assets) Northwest Bancshares, Inc. 1,457,698 13.698 % 904,555 8.500 % 851,346 8.000 % Northwest Bank 1,327,894 12.489 % 903,739 8.500 % 850,578 8.000 % Common equity tier 1 capital (to risk weighted assets) Northwest Bancshares, Inc. 1,331,918 12.516 % 744,928 7.000 % 691,719 6.500 % Northwest Bank 1,327,894 12.489 % 744,256 7.000 % 691,095 6.500 % Tier 1 capital (leverage) (to average assets) Northwest Bancshares, Inc. 1,457,698 10.283 % 567,025 4.000 % 708,782 5.000 % Northwest Bank 1,327,894 9.374 % 566,633 4.000 % 708,292 5.000 % (1) September 30, 2024 figures are estimated. (2) 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) September 30, 2024 Marketable securities available-for-sale Amortized cost Gross unrealized holding gains Gross unrealized holding losses Fair value Weighted averageduration Debt issued by the U.S. government and agencies: Due after ten years $ 46,292 — (8,497) 37,795 6.05 Debt issued by government sponsored enterprises: Due after one year through five years 136 — (4) 132 0.87 Municipal securities: Due after one year through five years 884 18 (2) 900 1.72 Due after five years through ten years 15,729 277 (1,382) 14,624 7.57 Due after ten years 52,244 288 (6,971) 45,561 10.37 Corporate debt issues: Due after five years through ten years 25,396 307 (867) 24,836 5.38 Mortgage-backed agency securities: Fixed rate pass-through 222,573 2,926 (12,641) 212,858 6.26 Variable rate pass-through 3,905 57 (4) 3,958 4.01 Fixed rate agency CMOs 835,445 3,801 (113,373) 725,873 5.22 Variable rate agency CMOs 45,500 44 (213) 45,331 7.68 Total mortgage-backed agency securities 1,107,423 6,828 (126,231) 988,020 5.55 Total marketable securities available-for-sale $ 1,248,104 7,718 (143,954) 1,111,868 5.79 Marketable securities held-to-maturity Government sponsored Due after one year through five years $ 109,460 — (10,520) 98,940 3.65 Due after five years through ten years 15,000 — (1,923) 13,077 5.04 Mortgage-backed agency securities: Fixed rate pass-through 136,439 — (16,184) 120,255 4.76 Variable rate pass-through 387 — — 387 3.00 Fixed rate agency CMOs 504,957 — (65,502) 439,455 5.66 Variable rate agency CMOs 529 — (2) 527 5.01 Total mortgage-backed agency securities 642,312 — (81,688) 560,624 5.47 Total marketable securities held-to-maturity $ 766,772 — (94,131) 672,641 5.20 Northwest Bancshares, Inc. and Subsidiaries Borrowed Funds (Unaudited) (dollars in thousands) September 30, 2024 Amount Average rate Term notes payable to the FHLB of Pittsburgh , due within one year $ 175,000 5.15 % Collateralized borrowings, due within one year 21,624 1.59 % Collateral received, due within one year 7,750 5.72 % Subordinated debentures, net of issuance costs 114,451 4.28 % Junior subordinated debentures 129,769 7.49 % Total borrowed funds * $ 448,594 5.44 % * As of September 30, 2024 , the Company had $3.3 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 September 30, 2024 , as well as $500 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 September 30, 2024 : Property type Percent of portfolio 5 or more unit dwelling 16.6 % Retail Building 11.5 Nursing Home 11.2 Commercial office building - non-owner occupied 8.9 Manufacturing & industrial building 5.4 Warehouse/storage building 5.1 Residential acquisition & development - 1-4 family, townhouses and apartments 4.3 Commercial office building - owner occupied 4.0 Multi-use building - commercial, retail and residential 3.9 Multi-use building - office and warehouse 3.1 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 14.2 Total 100.0 % The following table describes the collateral of our commercial real estate portfolio by state at September 30, 2024 : State Percent of portfolio New York 33.9 % Pennsylvania 29.3 Ohio 19.8 Indiana 8.9 All other 8.1 Total 100.0 % Northwest Bancshares, Inc. and Subsidiaries Asset Quality (Unaudited) (dollars in thousands) September 30 , 2024 June 30 , 2024 March 31 , 2024 December 31 , 2023 September 30 , 2023 Nonaccrual loans current: Residential mortgage loans $ 1,585 1,563 1,351 959 1,951 Home equity loans 1,239 1,088 974 871 947 Consumer loans 1,229 1,268 1,295 1,051 1,049 Commercial real estate loans 36,735 66,181 66,895 64,603 44,639 Commercial loans 1,922 788 934 1,182 1,369 Total nonaccrual loans current $ 42,710 70,888 71,449 68,666 49,955 Nonaccrual loans delinquent 30 days to 59 days: Residential mortgage loans $ 37 100 1,454 933 48 Home equity loans 157 260 125 174 92 Consumer loans 227 305 294 225 274 Commercial real estate loans 362 699 574 51 1,913 Commercial loans 444 183 161 139 90 Total nonaccrual loans delinquent 30 days to 59 days $ 1,227 1,547 2,608 1,522 2,417 Nonaccrual loans delinquent 60 days to 89 days: Residential mortgage loans $ 549 578 — 511 66 Home equity loans 87 234 488 347 319 Consumer loans 484 603 381 557 312 Commercial real estate loans 207 2,243 52 831 212 Commercial loans 48 8,088 201 56 291 Total nonaccrual loans delinquent 60 days to 89 days $ 1,375 11,746 1,122 2,302 1,200 Nonaccrual loans delinquent 90 days or more: Residential mortgage loans $ 5,370 4,162 4,304 6,324 7,695 Home equity loans 2,558 2,473 2,822 3,100 2,073 Consumer loans 3,265 2,433 2,659 3,212 2,463 Commercial real estate loans 6,167 5,849 6,931 6,488 8,416 Commercial loans 14,156 3,061 3,165 2,770 2,435 Total nonaccrual loans delinquent 90 days or more $ 31,516 17,978 19,881 21,894 23,082 Total nonaccrual loans $ 76,828 102,159 95,060 94,384 76,654 Total nonaccrual loans $ 76,828 102,159 95,060 94,384 76,654 Loans 90 days past due and still accruing 1,045 2,511 2,452 2,698 728 Nonperforming loans 77,873 104,670 97,512 97,082 77,382 Real estate owned, net 76 74 50 104 363 Nonperforming assets $ 77,949 104,744 97,562 97,186 77,745 Nonperforming loans to total loans 0.69 % 0.92 % 0.85 % 0.85 % 0.68 % Nonperforming assets to total assets 0.54 % 0.73 % 0.67 % 0.67 % 0.54 % Allowance for credit losses to total loans 1.11 % 1.10 % 1.09 % 1.10 % 1.10 % Allowance for credit losses to nonperforming loans 161.56 % 119.49 % 128.08 % 129.01 % 161.33 % Northwest Bancshares, Inc. and Subsidiaries Loans by Credit Quality Indicators (Unaudited) (dollars in thousands) At September 30, 2024 Pass Special mention * Substandard ** Doubtful Loss Loans receivable Personal Banking: Residential mortgage loans $ 3,246,727 — 11,431 — — 3,258,158 Home equity loans 1,162,951 — 4,251 — — 1,167,202 Consumer loans 1,992,110 — 5,922 — — 1,998,032 Total Personal Banking 6,401,788 — 21,604 — — 6,423,392 Commercial Banking: Commercial real estate loans 2,634,987 87,693 271,699 — — 2,994,379 Commercial loans 1,808,433 51,714 26,640 — — 1,886,787 Total Commercial Banking 4,443,420 139,407 298,339 — — 4,881,166 Total loans $ 10,845,208 139,407 319,943 — — 11,304,558 At June 30, 2024 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 * Includes $2.9 million , $2.5 million , $2.4 million , $7.8 million , and $6.9 million of acquired loans at September 30, 2024 , June 30, 2024 , March 31, 2024 , December 31, 2023 , and September 30, 2023 , respectively. ** Includes $26.0 million , $24.3 million , $27.2 million , $20.3 million , and $28.9 million of acquired loans at September 30, 2024 , June 30, 2024 , March 31, 2024 , December 31, 2023 , and September 30, 2023 , respectively. Northwest Bancshares, Inc. and Subsidiaries Loan Delinquency (Unaudited) (dollars in thousands) September 30 , 2024 * June 30 , 2024 * March 31 , 2024 * December 31 , 2023 * September 30 , 2023 * (Number of loans and dollar amount of loans) Loans delinquent 30 days to 59 days: Residential mortgage loans 16 $ 685 — % 12 $ 616 — % 351 $ 38,502 1.1 % 307 $ 30,041 0.9 % 6 $ 573 — % Home equity loans 112 3,907 0.3 % 104 3,771 0.3 % 113 4,608 0.4 % 121 5,761 0.5 % 112 4,707 0.4 % Consumer loans 801 10,777 0.5 % 742 10,372 0.5 % 737 9,911 0.5 % 896 11,211 0.5 % 733 9,874 0.5 % Commercial real estate loans 21 5,919 0.2 % 21 4,310 0.1 % 25 6,396 0.2 % 23 3,204 0.1 % 22 3,411 0.1 % Commercial loans 34 3,260 0.2 % 59 4,366 0.3 % 62 3,091 0.2 % 59 4,196 0.3 % 52 2,847 0.2 % Total loans delinquent 30 days to 59 days 984 $ 24,548 0.2 % 938 $ 23,435 0.2 % 1,288 $ 62,508 0.5 % 1,406 $ 54,413 0.5 % 925 $ 21,412 0.2 % Loans delinquent 60 days to 89 days: Residential mortgage loans 75 $ 9,027 0.3 % 70 $ 8,223 0.2 % 3 $ 70 — % 69 $ 7,796 0.2 % 56 $ 5,395 0.2 % Home equity loans 27 882 0.1 % 35 1,065 0.1 % 26 761 0.1 % 37 982 0.1 % 40 1,341 0.1 % Consumer loans 296 3,600 0.2 % 295 3,198 0.2 % 231 2,545 0.1 % 322 3,754 0.2 % 236 2,707 0.1 % Commercial real estate loans 11 7,643 0.3 % 9 3,155 0.1 % 5 807 — % 9 1,031 — % 13 1,588 0.1 % Commercial loans 19 753 — % 22 8,732 0.5 % 27 1,284 0.1 % 16 703 — % 15 981 0.1 % Total loans delinquent 60 days to 89 days 428 $ 21,905 0.2 % 431 $ 24,373 0.2 % 292 $ 5,467 — % 453 $ 14,266 0.1 % 360 $ 12,012 0.1 % Loans delinquent 90 days or more: ** Residential mortgage loans 52 $ 5,370 0.2 % 53 $ 5,553 0.2 % 50 $ 5,813 0.2 % 70 $ 7,995 0.2 % 79 $ 7,695 0.2 % Home equity loans 67 2,558 0.2 % 51 2,506 0.2 % 71 2,823 0.2 % 81 3,126 0.3 % 73 2,206 0.2 % Consumer loans 402 3,983 0.2 % 358 3,012 0.1 % 398 3,345 0.2 % 440 3,978 0.2 % 357 3,020 0.1 % Commercial real estate loans 13 6,167 0.2 % 19 6,034 0.2 % 22 6,931 0.2 % 27 6,712 0.2 % 27 8,416 0.3 % Commercial loans 85 14,484 0.8 % 72 3,385 0.2 % 62 3,421 0.2 % 53 2,780 0.2 % 39 2,472 0.2 % Total loans delinquent 90 days or more 619 $ 32,562 0.3 % 553 $ 20,490 0.2 % 603 $ 22,333 0.2 % 671 $ 24,591 0.2 % 575 $ 23,809 0.2 % Total loans delinquent 2,031 $ 79,015 0.7 % 1,922 $ 68,298 0.6 % 2,183 $ 90,308 0.8 % 2,530 $ 93,270 0.8 % 1,860 $ 57,233 0.5 % * Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding. ** Includes purchased credit deteriorated loans of $0.2 million , $0.1 million , $0.4 million , $0.6 million , and $1.4 million at September 30, 2024 , June 30, 2024 , March 31, 2024 , December 31, 2023 , and September 30, 2023 , respectively. Northwest Bancshares, Inc. and Subsidiaries Allowance for Credit Losses (Unaudited) (dollars in thousands) Quarter ended September 30 , 2024 June 30 , 2024 March 31 , 2024 December 31 , 2023 September 30 , 2023 Beginning balance $ 125,070 124,897 125,243 124,841 124,423 Provision 5,727 2,169 4,234 3,801 3,983 Charge-offs residential mortgage (255) (252) (162) (266) (171) Charge-offs home equity (890) (237) (412) (133) (320) Charge-offs consumer (3,560) (2,561) (4,573) (3,860) (3,085) Charge-offs commercial real estate (475) (500) (349) (742) (484) Charge-offs commercial (1,580) (1,319) (1,163) (806) (1,286) Recoveries 1,776 2,873 2,079 2,408 1,781 Ending balance $ 125,813 125,070 124,897 125,243 124,841 Net charge-offs to average loans, annualized 0.18 % 0.07 % 0.16 % 0.12 % 0.13 % Nine months ended September 30 , 2024 2023 Beginning balance $ 125,243 118,036 ASU 2022-02 Adoption — 426 Provision 12,130 14,863 Charge-offs residential mortgage (669) (923) Charge-offs home equity (1,539) (719) Charge-offs consumer (10,694) (8,591) Charge-offs commercial real estate (1,324) (1,624) Charge-offs commercial (4,062) (3,360) Recoveries 6,728 6,733 Ending balance $ 125,813 124,841 Net charge-offs to average loans, annualized 0.14 % 0.10 % 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 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 Average balance Interest Avg. yield/ cost Average balance Interest Avg. yield/ cost Average balance Interest Avg. yield/ cost Average balance Interest Avg. yield/ cost Average balance Interest Avg. yield/ cost Assets: Interest-earning assets: Residential mortgage loans $ 3,286,316 31,537 3.84 % $ 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 % Home equity loans 1,166,866 17,296 5.90 % 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 % Consumer loans 1,955,988 26,034 5.29 % 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 % Commercial real estate loans 2,995,032 47,473 6.31 % 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 % Commercial loans 1,819,400 34,837 7.62 % 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 % Total loans receivable (a) (b) (d) 11,223,602 157,177 5.57 % 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 % Mortgage-backed securities (c) 1,735,728 10,908 2.51 % 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 % Investment securities (c) (d) 263,127 1,504 2.29 % 287,262 1,316 1.83 % 333,752 1,430 1.71 % 335,121 1,425 1.70 % 336,125 1,431 1.70 % FHLB stock, at cost 20,849 394 7.51 % 25,544 498 7.84 % 32,249 607 7.57 % 35,082 665 7.52 % 37,722 668 7.03 % Other interest-earning deposits 173,770 2,312 5.29 % 135,520 1,791 5.23 % 61,666 832 5.34 % 71,987 970 5.27 % 67,143 915 5.33 % Total interest-earning assets 13,417,076 172,295 5.11 % 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 % Noninterest-earning assets (e) 934,593 907,432 918,331 893,426 966,364 Total assets $ 14,351,669 $ 14,458,592 $ 14,408,612 $ 14,329,020 $ 14,379,323 Liabilities and shareholders' equity: Interest-bearing liabilities: Savings deposits (g) $ 2,151,933 6,680 1.23 % $ 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 % Interest-bearing demand deposits (g) 2,567,682 7,452 1.15 % 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 % Money market deposit accounts (g) 1,966,684 9,170 1.85 % 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 % Time deposits (g) 2,830,737 30,896 4.34 % 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 % Borrowed funds (f) 220,677 2,266 4.09 % 323,191 3,662 4.56 % 469,697 5,708 4.89 % 548,089 6,826 4.94 % 643,518 7,937 4.89 % Subordinated debt 114,396 1,148 4.01 % 114,308 1,148 4.02 % 114,225 1,148 4.02 % 114,134 1,148 4.02 % 114,045 1,148 4.03 % Junior subordinated debentures 129,727 2,467 7.56 % 129,663 2,449 7.47 % 129,597 2,459 7.51 % 129,532 2,512 7.59 % 129,466 2,456 7.42 % Total interest-bearing liabilities 9,981,836 60,079 2.39 % 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 % Noninterest-bearing demand deposits (g) 2,579,775 2,595,511 2,567,781 2,675,788 2,757,091 Noninterest-bearing liabilities 217,161 263,634 257,269 234,177 257,141 Total liabilities 12,778,772 12,917,158 12,858,742 12,822,125 12,864,036 Shareholders' equity 1,572,897 1,541,434 1,549,870 1,506,895 1,515,287 Total liabilities and shareholders' equity $ 14,351,669 $ 14,458,592 $ 14,408,612 $ 14,329,020 $ 14,379,323 Net interest income/Interest rate spread FTE 112,216 2.72 % 107,724 2.58 % 104,095 2.52 % 107,060 2.63 % 109,258 2.77 % Net interest-earning assets/Net interest margin FTE $ 3,435,240 3.33 % $ 3,493,147 3.20 % $ 3,456,589 3.10 % $ 3,523,434 3.16 % $ 3,563,155 3.23 % Tax equivalent adjustment (d) 914 883 857 758 890 Net interest income, GAAP basis 111,302 106,841 103,238 106,302 108,368 Ratio of interest-earning assets to interest-bearing liabilities 1.34X 1.35X 1.34X 1.36X 1.36X (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 1.78%, 1.76%, 1.61%, 1.37%, and 1.07%, respectively, and average cost of Interest-bearing deposits were 2.27%, 2.24%, 2.06%, 1.77%, and 1.40%, 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. Nine months ended September 30 , 2024 2023 Average balance Interest Avg. yield/ cost (h) Average balance Interest Avg. yield/ cost (h) Assets Interest-earning assets: Residential mortgage loans $ 3,340,332 96,392 3.85 % $ 3,485,130 97,090 3.71 % Home equity loans 1,185,145 51,893 5.85 % 1,273,878 50,467 5.30 % Consumer loans 2,012,461 77,401 5.14 % 2,119,717 66,977 4.22 % Commercial real estate loans 3,005,966 136,556 6.07 % 2,857,555 117,074 5.40 % Commercial loans 1,768,325 99,923 7.55 % 1,312,750 67,465 6.78 % Loans receivable (a) (b) (d) 11,312,229 462,165 5.46 % 11,049,030 399,073 4.83 % Mortgage-backed securities (c) 1,729,064 28,278 2.18 % 1,849,567 24,935 1.80 % Investment securities (c) (d) 294,598 4,251 1.92 % 364,956 4,909 1.79 % FHLB stock, at cost 26,195 1,499 7.64 % 40,945 2,202 7.19 % Other interest-earning deposits 124,037 4,935 5.31 % 64,560 1,931 4.00 % Total interest-earning assets 13,486,123 501,128 4.96 % 13,369,058 433,050 4.33 % Noninterest-earning assets (e) 919,969 880,799 Total assets $ 14,406,092 $ 14,249,857 Liabilities and shareholders' equity Interest-bearing liabilities: Savings deposits (g) $ 2,139,461 17,673 1.10 % $ 2,163,564 4,777 0.30 % Interest-bearing demand deposits (g) 2,554,172 19,501 1.02 % 2,550,433 6,684 0.35 % Money market deposit accounts (g) 1,962,019 25,684 1.75 % 2,246,422 17,289 1.03 % Time deposits (g) 2,787,306 91,780 4.40 % 1,733,428 35,993 2.78 % Borrowed funds (f) 337,427 11,636 4.61 % 740,011 26,077 4.71 % Subordinated debt 114,310 3,444 4.02 % 113,958 3,444 4.03 % Junior subordinated debentures 129,662 7,375 7.60 % 129,401 6,889 7.02 % Total interest-bearing liabilities 10,024,357 177,093 2.36 % 9,677,217 101,153 1.40 % Noninterest-bearing demand deposits (g) 2,581,018 2,822,178 Noninterest-bearing liabilities 245,917 239,034 Total liabilities 12,851,292 12,738,429 Shareholders' equity 1,554,800 1,511,428 Total liabilities and shareholders' equity $ 14,406,092 $ 14,249,857 Net interest income/Interest rate spread 324,035 2.60 % 331,897 2.93 % Net interest-earning assets/Net interest margin $ 3,461,766 3.21 % $ 3,691,841 3.32 % Tax equivalent adjustment (d) 2,654 2,516 Net interest income, GAAP basis 321,381 329,381 Ratio of interest-earning assets to interest-bearing liabilities 1.35X 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 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 1.72% and 0.75%, respectively and average cost of Interest-bearing deposits were 2.19% and 1.00%, respectively. View original content to download multimedia: https://www.prnewswire.com/news-releases/northwest-bancshares-inc-announces-third-quarter-2024-net-income-of-34-million-or-0-26-per-diluted-share-302289095.html SOURCE Northwest Bancshares, Inc.

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